The FTC Goes After Huge Pharmacy Benefit Managers for Skyrocketing Drug Prices
FTC Plans to Legally Challenge Prescription Medication Intermediaries for Overpricing
The Federal Trade Commission (FTC) is planning to slap a lawsuitsuit lawsuitsuits on the three mega pharmacy benefit managers (PBMs) in America – Caremark Rx, Express Scripts, and OptumRx – for their shady business practices that have been artificially jacking up drug prices, according to recent reports in the Wall Street Journal and STAT. This move comes just a day after the FTC revealed it had finished a two-year-long investigation into the pharma industry.
What's the Big Deal with PBMs?
PBMs, commonly known as middlemen, handle prescriptions for employers and insurers. Their job is to negotiate deals with drug companies for lower drug prices for the consumers, but critics say these guys are actually working against us. They point fingers at PBMs for increasing drug prices without having the proper motivation to get better deals for patients.
These three PBMs – Caremark, Express Scripts, and OptumRx – account for around 80% of the 6.6 billion prescriptions filled each year, as per STAT. Surprisingly enough, these will be the only ones being sued by the FTC, despite the fact that the next three are also significant. The top six PBMs control 94% of the market, according to Marketwatch.
OptumRx is owned by insurance behemoth UnitedHealth, Caremark is owned by giant pharmacy chain CVS, and Express Scripts is in the hands of insurance company Cigna. That's where the critics step in and argue these ownership ties don't allow for fair negotiations in the first place.
Is the FTC Going After Insulin Manufacturers Too?
The FTC might also take on the largest insulin manufacturers over the mesmerizing rise in prices in the past decade. Some lawmakers, like Bernie Sanders, have blasted drug companies for their price-gouging, including the soaring cost of insulin. The scrutiny led Lilly, Sanofi, and Novo Nordisk to promise lower insulin prices this year.
When Might This Lawsuit Drop?
It's unclear when the FTC will make its move, as per the reports. The agency didn't respond to questions sent on Wednesday.
The PBMs have defended their work, with Caremark emailing Gizmodo saying, "We're proud of the work we have done to make insulin more affordable for all Americans with diabetes," and noting the price of insulin has gone down. Caremark's members typically pay less than $25, a far cry from the list price and the $35 cap set by the Biden Administration, according to David Whitrap, Vice President of External Affairs at Caremark.
Express Scripts and OptumRx didn't respond to emails sent on Wednesday. Gizmodo will update this post if we hear back.
- The Federal Trade Commission (FTC) has been criticized for not suing the next three significant Pharmacy Benefit Managers (PBMs) despite them controlling a significant portion of the market.
- The average consumer is concerned about the future of technology in the pharmaceutical industry, given the PBMs' alleged practices of increasing drug prices without proper motivation for better deals for patients.
- Despite promises from the top insulin manufacturers like Lilly, Sanofi, and Novo Nordisk to lower insulin prices this year, some federal lawmakers, such as Bernie Sanders, continue to criticize them for price-gouging.
- Although the exact timeline is uncertain, the FTC is expected to drop lawsuits against technology giants like Caremark Rx, Express Scripts, and OptumRx over their suspected shady business practices influencing the average person's prescriptions.
