FTC puts PBMs and Pharma “On Notice” over Insulin Prices

June 20, 2022

The US Federal Trade Commission (FTC) has issued a new policy statement saying it will actively target pharmacy benefit managers (PBMs) and drugmakers in its efforts to lower the cost of insulin. The agency noted that it would increase its vigilance to stop actions that “block patients’ access to competing lower-cost drugs.” The move comes amid increasing attention to escalating list prices for insulin that are, in part, driven by deals made between PBMs, payers, and manufacturers.

According to Fraiser Kansteiner, “Most patients’ insurance covers at least part of their prescription medicine costs. Those health plans are typically orchestrated by so-called drug middlemen like pharmacy benefit managers and often use formularies to define the medicines they’ll cover. In turn, drugmakers use rebates to secure spots for their medicines on formularies or ‘preferred tiers of formularies to ensure those drugs are covered’ FTC added. Thing is, those rebates are often conditioned on the drug keeping its preferred formulary position, and some rebates and fees hinge on the sales volume of certain pricey prescription meds, FTC said. ‘In addition to other factors, some have suggested that high rebates and fees to PBMs and other intermediaries may incentivize higher list prices for drugs and discourage coverage of the lowest-cost products,’ the regulator pointed out in its release.”

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