Advocates for lower drug prices say a federal lawsuit filed this month against St Louis-based Express Scripts and two other companies could result in more affordable medicine for patients.
The Federal Trade Commission on Sept. 20 filed an administrative complaint against the pharmacy benefit manager, alleging it and two other companies, OptumRx and Caremark, have artificially inflated insulin prices at the expense of patients.
“Insulin is the poster child of Respondents' broken drug pricing system,” the FTC wrote in its complaint. “It is time to put an end to the Respondents’ unfair and unlawful business practices and to prevent their recurrence.”
Pharmacy benefits managers negotiate with drug manufacturers and insurance companies to set patient drug prices. They do so by deciding which medicines to place on the list of drugs, called a formulary, that insurance will cover.
Because drugmakers want their medicine included on the lists, they offer discounts to the companies through the benefits managers. The suit claims the companies choose higher-priced insulins to include in plans while ignoring lower-priced options, and pocket the high rebates from manufacturers.
The companies deny the claims. Express Scripts officials could not be reached for comment. But in a statement, they called the FTC’s actions “unsubstantiated” and “ideologically-driven.”
“The fact is that in the unlikely event the FTC succeeds in its suit and forces PBMs to include drugs on formulary ... the FTC will drive drug prices higher in this country,” Andrea Nelson, chief legal officer of the Cigna Group, which owns Express Scripts, said in a press release. “This will hurt consumers and those who provide their prescription drug benefits – including employers, labor unions, and the federal government itself.”
Express Scripts officials said in a statement the federal agency ignores that Express Scripts has long attempted to get insurers to include lower-priced drugs.
The FTC’s complaint shows federal regulators are beginning to take seriously the complaints about business practices of pharmacy benefit managers, said Benjamin Jolley, a pharmacist in Salt Lake City and fellow at the American Economic Liberties Project, which advocates for antitrust laws.
Jolley, who has seen the cost of insulin readily rise during his career, called the rebate system a legal kind of kickback.
But the suit shows the government is getting more aggressive toward the industry, he said.
“Insulin, I think we can view it as a test case,” Jolley said. “Is this overall system of rebates broadly legal or illegal? Is it acceptable under the antitrust laws? The FTC is alleging that, no, it is not.”
The suit before the Federal Trade Commission is the latest in a series of lobs between federal regulators and benefit managers. In July, the FTC released a report that called the companies “powerful middlemen inflating drug costs and squeezing Main Street Pharmacies.”
Both the FTC and patient advocates say Express Scripts and other companies are not solely to blame for high drug prices.
Drug manufacturers also influence prices, said Shaina Kasper, said Shaina Kasper, executive director of the diabetes nonprofit T1 International.
“Pharmacy Benefit Managers are also complicit, manipulating the market to drive up prices, but let us be clear: PBMs do not unilaterally set the price of insulin,” Kasper wrote in an email. “It's time for these companies to stop profiteering and put people over profit. While we applaud the FTC for taking this step, we also hope for additional action to move us closer to affordable and accessible insulin for all.”
Earlier this month, Express Scripts filed a defamation suit against the FTC in a federal court in Missouri, alleging that the claims in the July report were false and that the agency “failed to take into account the value [the companies] deliver to consumers and patients.”
If the Federal Trade Commission finds the companies broke the law, it could force them to include lower-priced drugs in insurance plans. The commission also could bar the companies from accepting compensation based on a drug’s wholesale list price.
“I think if you take out the incentives for the distortion of drug prices, then we create a more level playing field,” said Loretta Boesing, founder of Missouri-based advocacy group Unite for Safe Medications.
She hopes the insulin suit will lower costs for other drugs.
“Patients are harmed when they are forced to get a medication that's a higher cost solely because of the PBM profits,” Boesing said. “Some patients have died because they walked away from the pharmacy counters empty-handed. So I feel like if the lawsuit is successful and the FTC does win this case, then it's going to change the future of how our our so I believe it will help lower drug costs for everyone.”
