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FTC sues 3 top pharmacy managers over price inflation

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In a major move against the pharmaceutical industry, the U.S. Federal Trade Commission is taking legal action against three of the country’s largest pharmacy benefit managers, or PBMs. The companies are CVS Health’s Caremark Rx, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx.

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The FTC filed a lawsuit on Friday, Sept. 20, accusing the companies of steering diabetes patients toward higher-priced insulin to secure millions in rebates from pharmaceutical companies. The FTC alleges that companies — and their affiliated group purchasing organizations — built a system that prioritizes high rebates from drug manufacturers.

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The legal action is part of a broader effort by the Biden administration to tackle rising drug prices. Meanwhile, companies are pushing back. CVS said the FTC’s allegations are “simply wrong” and insists it has worked to lower insulin costs.

Cigna’s Chief Legal Officer Andrea Nelson called the lawsuit politically motivated, arguing that if the FTC succeeds in forcing PBMs to include more expensive drugs in the coverage plans, it could actually lead to higher drug prices across the board.

The FTC said the goal is to fix a broken system that drives up drug prices.

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Jack Aylmer

IN A MAJOR MOVE AGAINST THE PHARMACEUTICAL INDUSTRY, THE U.S. FEDERAL TRADE COMMISSION IS TAKING LEGAL ACTION AGAINST THREE OF THE COUNTRY’S LARGEST PHARMACY BENEFIT MANAGERS or PBMs.

THE COMPANIES ARE C-V-S HEALTH’S CARE-MARK R-X, CIGNA’S EXPRESS SCRIPTS, AND UNITEDHEALTH GROUP’S OPTUM-R-X

THE FTC FILED A LAWSUIT ON FRIDAY, ACCUSING THEM OF STEERING DIABETES PATIENTS TOWARD HIGHER-PRICED INSULIN TO SECURE MILLIONS IN REBATES FROM PHARMACEUTICAL COMPANIES. 

THE F-T-C ALLEGES THE COMPANIES – AND THEIR AFFILIATED GROUP PURCHASING ORGANIZATIONS – BUILT A SYSTEM THAT PRIORITIZES HIGH REBATES FROM DRUG MANUFACTURERS.

THIS LEGAL ACTION IS PART OF A BROADER EFFORT BY THE BIDEN ADMINISTRATION TO TACKLE RISING DRUG PRICES.

MEANWHILE, THE COMPANIES ARE PUSHING BACK. CVS SAYS THE FTC’S ALLEGATIONS ARE ‘SIMPLY WRONG’ AND INSISTS IT’S WORKED TO LOWER INSULIN COSTS. 

CIGNA’S CHIEF LEGAL OFFICER, CALLED THE LAWSUIT POLITICALLY MOTIVATED, ARGUING THAT IF THE FTC SUCCEEDS IN FORCING PBMs TO INCLUDE MORE EXPENSIVE DRUGS IN COVERAGE PLANS, IT COULD ACTUALLY LEAD TO HIGHER DRUG PRICES ACROSS THE BOARD. 

THE FTC SAYS THE GOAL IS TO FIX A BROKEN SYSTEM THAT DRIVES UP DRUG PRICES ACROSS THE BOARD.

AS THIS CASE UNFOLDS, WE’LL BE FOLLOWING THE DEVELOPMENT TO SEE HOW THIS FIGHT OVER DRUG PRICING IMPACTS PATIENTS, THE HEALTHCARE INDUSTRY, AND THE BROADER PUSH TO BRING RELIEF TO THOSE STRUGGLING WITH HIGH PRESCRIPTION COSTS. 

FOR SAN, I’M JACK AYLMER