Pharmaceutical Middlemen Illegally Raising Insulin Prices, FTC Says

Federal regulators are accusing the nation’s three largest drug plan managers of illegally raising the cost of insulin in the United States while making it harder for patients to get cheaper versions of the life-saving drug.

The companies – CVS-owned Caremark Rx, Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx – acted to stifle competition in the insulin drug industry, including through unfair discounting practices, the Federal Trade Commission said Friday.

This artificially increased the list price of insulin, creating what the agency called a “drug discount system that favors deep discounts” from drugmakers, the FTC alleged in announcing lawsuits against the three companies and their subsidiaries.

Pharmacy benefit managers, known as PBMs, administer prescription drug plans for health insurance programs, including Medicare, and serve as middlemen with pharmacies, employers and drug manufacturers. Caremark, Express Scripts and Optum together administer about 80% of all prescriptions in the United States, according to the FTC.

“Millions of Americans with diabetes rely on insulin to survive, but for many of these vulnerable patients, the cost of their insulin treatment has skyrocketed over the past decade, in part because of powerful PBMs and their greed,” Rahul Rao, deputy director of the FTC’s Bureau of Competition, said in a statement. “Caremark, ESI, and Optum – as gatekeepers to drugs – have gouged millions of dollars off the backs of patients who need life-saving medications.”

CVS Caremark and Optum have disputed the FTC’s allegations.

“CVS Caremark is proud of the work we have done to make insulin more affordable for all Americans with diabetes. To pretend otherwise, as the FTC did today, is simply false,” the company said in a statement to CBS News.

A CVS spokesperson also said the company has a history of protecting patients from rising prescription drug prices and has “led the way in lowering the cost of insulin for all patients.”

CVS members pay an average of less than $25 for insulin, according to the company, which added that it negotiates deep discounts for its customers.

Optum called the FTC’s allegations “baseless.”

“For many years, Optum Rx has been aggressively and successfully negotiating with drug manufacturers and taking additional steps to reduce prescription insulin costs for our health plan customers and their members, who now pay an average of less than $18 per month for insulin,” the company said in a statement to CBS News.

Cigna did not immediately respond to CBS News’ request for comment on the lawsuits.

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