Big Pharma and the Health Care Giants have bilked consumers out of billions of dollars.
The Federal Trade Commission (FTC) is gearing up to sue major health care companies, accusing them of illegally boosting profits by directing patients towards expensive medications, according to insiders. The lawsuit, expected to be filed soon, targets pharmaceutical intermediaries owned by UnitedHealth Group, CVS, and Cigna. These companies allegedly pushed patients towards costly brand-name drugs, including insulin.
At the heart of the issue are the rebates drug companies pay to get their medications listed on insurance-covered drug lists. Lawmakers, federal regulators, and patient advocates argue that these rebates can drive up drug prices. The impending lawsuit aims to address this by holding large pharmaceutical intermediaries accountable.
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The case has been brewing for some time, with executives and lawyers from the targeted companies meeting with FTC commissioners in recent weeks to try to avert legal action. Interestingly, the FTC’s two Republican commissioners have recused themselves from the case due to previous work on similar investigations.
A spokesperson for the Pharmaceutical Care Management Association defended the role of pharmacy benefit managers (PBMs), stating that they have a proven track record of lowering prescription drug costs. The blame, they argue, lies with drug manufacturers who set high list prices.
Express Scripts, another company under scrutiny, also pointed fingers at drugmakers, noting that their average insulin prices are under $25. CVS echoed this sentiment, vowing to defend their cost-saving measures vigorously.
Optum, part of UnitedHealth Group, declined to comment on the lawsuit.
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This lawsuit is part of a broader crackdown on high drug costs in the U.S., where patients and insurers pay more for medications than in other countries. The FTC recently released a critical report on PBMs, blocked Sanofi’s exclusive license for a rival drug in development, and sued to prevent Amgen’s acquisition of Horizon Therapeutics due to concerns over exclusionary rebates.
Insulin prices have been a focal point in this battle. Despite being prescribed for a century, insulin remains costly in the U.S., with only three companies supplying most of it. President Joe Biden and Senator Bernie Sanders have criticized Novo Nordisk and Eli Lilly for high prices on new diabetes drugs.
The White House has prioritized cracking down on anti-competitive conduct to lower prices on essential goods. The FTC’s current efforts are part of this broader strategy, tackling not just health care but also grocery costs and airline prices.
The FTC has multiple legal avenues to pursue in this case, including using the FTC Act and the Robinson-Patman Act. The agency aims to curtail practices that steer patients towards high-cost drugs over cheaper alternatives, which increase costs for both patients and payers.
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Pharmacy benefit managers like Optum Rx, Caremark, and Express Scripts dominate the prescription claims market, processing nearly 80% of claims in the U.S. Their complex relationships with drugmakers and insurers create a market rife with conflicting incentives, potentially inflating drug costs and harming small pharmacies.
Key Points:
- The FTC is preparing to sue major health care companies for allegedly steering patients towards high-cost drugs to maximize profits.
- The lawsuit targets pharmaceutical intermediaries owned by UnitedHealth Group, CVS, and Cigna, accusing them of driving up drug prices through rebate schemes.
- This legal action is part of a broader effort to reduce high drug costs in the U.S., where prices are significantly higher than in other countries.
- Insulin prices have been a particular focus, with President Biden and Senator Bernie Sanders criticizing companies for high costs despite the availability of cheaper alternatives.
- The FTC’s lawsuit will address practices that steer patients towards expensive medications, aiming to lower costs for both patients and payers.
Al Santana – Reprinted with permission of Whatfinger News