FTC to Sue Drug Middlemen Over Insulin Prices

The U.S. Federal Trade Commission is planning to sue UnitedHealth, Cigna and CVS Health — the three largest pharmacy-benefit managers — over their tactics for negotiating prices for drugs including insulin, a person familiar with the matter told Reuters Wednesday.

Pharmacy benefit managers, or PBMs, act as middlemen between drug companies and consumers. They negotiate fees and volume-based discounts, known as rebates, with drug manufacturers, create lists of medications that are covered by insurance, and reimburse pharmacies for prescriptions.

The three biggest PBMs are UnitedHealth's Optum unit, CVS Health's CVS Caremark and Cigna's Express Scripts.

"Any action that limits the use of these PBM negotiating tools would reward the pharmaceutical industry and return the market to a broken state, leaving American businesses and patients at the mercy of the prices drugmakers set," a CVS spokesperson said, adding that the company will defend the use of these tools vigorously.

UnitedHealth declined to comment, while Cigna did not immediately respond to a Reuters request for comment.

The Wall Street Journal first reported the FTC's move.

The FTC is also looking at drugmakers as part of the insulin probe, the source said. The three largest insulin makers include Sanofi, Novo Nordisk and Eli Lilly.

• FTC: Middlemen Unduly Influence US Drug Prices