Texas sues PBMs and drug manufacturers for insulin price collusion
Two weeks after the Federal Trade Commission (FTC) announced it was suing the three largest pharmacy benefit managers (PBMs) in the country, the state of Texas has filed its own claim against the same companies, along with three drug developers.
Texas Attorney General Ken Paxton announced the state will be taking Cigna’s ExpressScripts, CVS Health’s Caremark and UnitedHealth Group’s Optum RX to court, claiming the PBMs are responsible for “artificially and willingly” raising the price of insulin.
In its lawsuit, the FTC also used insulin prices as a focal point, claiming the three PBMs, their parent companies and associated group purchasing organizations all colluded to control prices in the pharmaceutical supply chain.
While the FTC only warned manufacturers for their role in providing rebates for drugs that PBMs then sell—without passing on the discount—to pharmacies, Texas has opted to sue drugmakers outright.
In the Texas lawsuit, the state named Eli Lilly, Novo Nordisk and Sanofi as defendants, claiming they continually sought higher insulin profits to compensate for the rebates they dished out. The state accused drug manufacturers of “raising the prices of insulin then [paying] a significant, undisclosed portion back to the PBMs as a quid pro quo.”
“This is a disturbing conspiracy by which pharmaceutical companies were intentionally and artificially inflating the price of insulin. Big Pharma insulin manufacturers and PBMs worked together to take advantage of diabetes patients and drive prices as high as they could,” Paxton said in a statement. “These companies acted illegally and unethically to enrich themselves, and we will hold them accountable.”
Despite these accusations being relevant to many important drugs, insulin has been the focus of these antitrust lawsuits because it's vital for the survival of diabetic patients, and its price hikes have been uniquely high.
Despite costing $2 to produce, the price for an insulin prescription ranges from “between $300 and $700,” Paxton’s office said. In the late '90s, insulin retailed for $20.
The PBMs and drug companies are being sued under the Texas Deceptive Trade Practices Act, which regulates “unjust enrichment” and price collusion.
In separate statements, the defendants have denied the claims. The Texas lawsuit is expected to move forward next year.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.