FTC Accuses Drug Middlemen of Inflating Insulin Prices
The FTC is suing CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx for inflating insulin prices and harming consumers, amid increasing scrutiny of pharmacy benefit managers.
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The Federal Trade Commission (FTC) has initiated legal action against the three largest pharmacy benefit managers (PBMs) in the U.S.—CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx—accusing them of inflating insulin prices and steering patients towards more expensive insulin products to maximize profits. The FTC claims these PBMs, which control 80% of U.S. prescriptions, distort competition and harm consumers by favoring higher-cost medications. The agency's complaint, which is not yet public, seeks to prohibit these practices. The PBMs have denied the allegations, asserting they help lower costs for patients and are being unfairly blamed for high drug prices set by manufacturers. Insulin prices have been a significant issue, with many patients previously facing high out-of-pocket costs. Recent federal caps on insulin costs have alleviated some of this burden. The FTC's actions come amid increasing scrutiny of PBMs and their role in drug pricing, with the agency under Lina Khan taking a more aggressive stance against perceived anti-competitive practices. The outcome of this legal action may be influenced by the upcoming presidential election, as potential changes in administration could affect the FTC's direction.
- The FTC is suing major PBMs for inflating insulin prices and harming consumers.
- The three PBMs control 80% of U.S. prescriptions and are accused of favoring higher-cost drugs.
- Insulin pricing has been a critical issue, with recent federal caps helping some patients.
- The PBMs deny wrongdoing, claiming they reduce costs for patients.
- The legal action's future may depend on the outcome of the upcoming presidential election.
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6 commentsIntuitively, a healthy market should prevent this kind of price gouging because there’s a strong incentive for new players to undercut incumbents. I can’t charge too much for gas because the station across the street will undercut me. If prices are growing that isn’t necessarily a bad sign. But we have seen several areas, like rent prices, eggs, meat, and oil, where profits grew unconstrained. And that’s a strong indicator that something is wrong.
Lena Khan is very sharp and seems to be cracking down on this kind of thing. I just hope she is able to continue.
I wish people would stop calling what we have a healthcare system. We have a medical industry, which seeks to provide a minimum of medical services for maximum profit. The system is working exactly as designed.
It has now come to the FTC to protect us because the FDA has been strongly aligned with big money. If Trump comes to power, however, the FTC would be on the chopping block.
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