FTC goes after drug middlemen for allegedly jacking up insulin prices

The price of insulin has exponentially increased in recent years. Now, the Federal Trade Commission (FTC) is suing three companies over allegedly inflating the cost of the drug at the expense of Americans who rely on it.

The lawsuit targets three pharmacy benefit managers (PBMs), or middlemen, who handle most (at least 80%) of the scripts in the U.S.: UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts. 

“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,” Rahul Rao, deputy director of the FTC’s Bureau of Competition, said in a statement. 

The end of the Big Three

“The FTC’s administrative action seeks to put an end to the Big Three PBMs’ exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers,” Rao continued. 

The move should come as no big surprise. It’s consistent with the FTC’s July report, which alleged that prescription drug intermediaries killed off the price of two different cancer drugs—nearly $1.6 billion in extra revenue in less than three years—by directing business to affiliated pharmacies. That report also pointed to CVS Caremark, Express Scripts, and Optum Rx.

The report alleged that “market concentration” means the companies can drive up prices, no matter how it impacts patients. However, Express Scripts pushed back this week, filing a lawsuit over the July report, saying it was merely a matter of “ideological bias.”

Insulin can cost patients hundreds of dollars a month, and the price has drastically increased in recent years, inflating 24% between 2017 and 2022, according to the American Diabetes Association. It also costs far more in America than in at least 33 high-income countries—more than nine times higher, according to a 2024 Rand report.

The quest for affordable prices

The Biden administration has made some efforts to protect Americans from unaffordable drug prices. Biden signed the Inflation Reduction Act, which capped insulin at $35 per month, but it only helps those with Medicare benefits, not with private insurance. That means, for many, insulin is still massively costly, and often, completely unaffordable.

Given how tough it is for so many to afford their life-saving drugs, some have even taken to joining groups on Facebook to acquire more affordable insulin. Likewise, the hashtag #insulin4all on X brings up hundreds of postings. Some diabetes sufferers use the hashtag to ask for insulin, some are offering it, and others are simply sharing their struggle to pay astronomical drug bills.

The FTC said it could take action against other drugmakers, including Eli Lilly, Sanofi, and Novo Nordisk, as well. “Although not named in this case, all drug manufacturers should be on notice that their participation in the type of conduct challenged here can raise serious concerns.”