Input Stories

The federal government is suing the three largest pharmacy benefit managers, saying the companies artificially inflated insulin costs (The Associated Press).

What’s going on: “Three companies that process about 80% of prescriptions in the United States—Caremark, Express Scripts and OptumRx—have … spur[red] price increases, the Federal Trade Commission alleged in a lawsuit filed Friday.”

• PBMs are underregulated middlemen that design, negotiate and administer prescription drug benefits on behalf of health insurance companies and employers that self-fund health insurance plans for their employees. PBMs increase health care costs by applying upward pressure on medicines’ list prices and pocketing manufacturer rebates.
• The NAM’s ongoing advocacy helped a bill containing critical PBM-reform provisions clear a House committee last week.

What they’re saying: “The FTC said the rebating practices of the three companies have led to artificially inflated list prices” for medicines such as insulin.

• PBMs’ emphasis on pocketing large rebates—rather than passing them on to employers or consumers—is under scrutiny by the FTC. According to the agency, “PBMs’ chase-the-rebate strategy has led to skyrocketing list prices” for medicines that Americans depend on.

Why it’s important: “Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed,” FTC Bureau of Competition Deputy Director Rahul Rao said (CBS News).

The last word: “Congress must act to bring much-needed reform to the PBM system—and, in so doing, reduce health care costs for both manufacturers and manufacturing workers,” said NAM Vice President of Domestic Policy Charles Crain.