FTC Sues Major PBMs Over Alleged Medication Price Inflation

The Federal Trade Commission (FTC) plans to sue three major U.S. health companies—UnitedHealth Group's Optum Rx, CVS Health's Caremark, and Cigna's Express Scripts—for inflating medication prices, including insulin. These companies, known as pharmacy benefit managers (PBMs), negotiate drug prices on behalf of insurers and employers. The FTC alleges that PBMs manipulate rebates from drug manufacturers to boost their profits, driving up costs for patients.

PBMs argue that drug manufacturers set high prices, while manufacturers blame PBMs' rebates and fees for forcing price hikes. The FTC's investigation, ongoing since 2022, targets these practices. The agency's recent report accuses the largest PBMs of exploiting the drug supply chain at the expense of smaller pharmacies and patients.

The Biden administration supports increased transparency in PBM operations, aiming to make prescription drugs more affordable. The Inflation Reduction Act caps insulin prices for Medicare beneficiaries at $35 per month, though this cap does not extend to those with private insurance.