FTC expected to sue PBMs, including CVS, over pricing

The Federal Trade Commission issued a scathing report about the drug-pricing practices of pharmacy benefit managers and plans to sue the three largest PBMs, according to reports.

The suit, targeting Optum Rx, CVS Caremark, and Express Scripts, would focus on the rebates that the PBMs negotiate with drug manufacturers for insulin and other drugs, according to a Wall Street Journal article.

The FTC’s interim report, titled “Pharmacy Benefit Managers: Ten Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies,” found that PBMs may be contributing to the failure of some independent pharmacies and that they may steer patients away from less-expensive drugs to drive their own sales and profits.

A spokesperson for Optum Rx said that is not the case.

“PBMs, like Optum Rx, are the key counterweight to pharmaceutical companies’ monopoly power to set and raise drug prices,” the Optum Rx spokesperson told Supermarket News. “The money we are saving the employers, unions, governments, and payers who rely on us to negotiate savings is helping consumers through reduced premiums, point-of-sale discounts on medicines, and greater investment in population health and wellness programs.”

Optum Rx also criticized the FTC’s report, citing the dissenting statement of FTC Commissioner Melissa Holyoak.

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“The FTC has rushed to publish an incomplete report with flawed conclusions that do not follow from the data and information Optum Rx provided to the agency,” the Optum Rx spokesperson said.

A CVS spokesperson said that when it comes to insulin costs, CVS Caremark has pushed back against price increases implemented by manufacturers.

“Three brand drugmakers control nearly the entire insulin market, and without competitive biosimilar alternatives, they raised their list prices by as much as 500% in lockstep with one another prior to 2012,” said David Whitrap, VP of external affairs at CVS Health.

He said CVS has worked to keep prices down for consumers by fueling increased competition.

“CVS Caremark is proud of the work we have done to make medicine more affordable, and we stand by our record of protecting American businesses, unions, and patients from rising drug prices,” he said.

Express Scripts could not be reached for comment.

The news comes as legislators from both parties at both the federal and state levels have begun looking at ways to regulate PBMs, which negotiate prices with drug manufacturers and then set rates for insurance companies. Both independent pharmacies and large chains have cited prescription drug pricing and reimbursements as challenging their ability to operate profitably.

Related:CVS cuts its 2024 profit forecast

The FTC’s interim report bolsters the longstanding position of the National Community Pharmacists Association that PBM pricing practices are making it difficult for independent pharmacies to survive.

“It has been abundantly clear for years that policymakers must level the playing field,” said NCPA CEO B. Douglas Hoey. “Congress must swiftly enact reforms to rein them in, and states should continue doing so as well.

He also said FTC should continue its investigation “and pursue the information that the PBMs have so far defiantly withheld.”

“Patients and community pharmacies need this fight to be finished, and need it urgently,” he said.