Antitrust agency targets PBMs’ business practices

  • FTC plans to sue the largest three pharmacy-benefit managers over insulin prices
  • Investigation into whether PBMs steer patients away from less expensive medicines
  • Three largest PBMs handle 80% of U.S. prescriptions
  • CVS Caremark defends its record on making insulin affordable

The Federal Trade Commission (FTC) is preparing to sue the three largest pharmacy-benefit managers (PBMs) over their tactics for negotiating insulin prices, following a two-year investigation into whether these companies steer patients away from less expensive medicines. The FTC plans to file lawsuits targeting the business practices related to rebates brokered with drug manufacturers. PBMs manage prescription-drug transactions for insurers and employers, negotiating discounts on behalf of their customers. UnitedHealth Group’s OptumRx, Cigna Group’s Express Scripts, and CVS Health’s Caremark handle around 80% of U.S. prescriptions. Each company shares a parent with a large health insurer. CVS Caremark defended its record on making insulin more affordable for Americans with diabetes.

Factuality Level: 8
Factuality Justification: The article provides accurate information about the Federal Trade Commission’s plans to sue the largest three pharmacy-benefit managers over their business practices related to negotiating drug prices and includes statements from one of the companies involved. It also references an interim report on the investigation. However, it could be improved by providing more details on the specific tactics being investigated and including perspectives from other sources beyond the companies under investigation.
Noise Level: 4
Noise Justification: The article provides relevant information about the Federal Trade Commission’s plans to sue the largest three pharmacy-benefit managers over their tactics related to insulin prices and includes comments from one of the companies involved. However, it could benefit from more in-depth analysis of the issue and potential consequences for patients and the healthcare system.
Public Companies: UnitedHealth Group (UNH), Cigna Group (CI), CVS Health (CVS)
Key People: Dave Michaels (Contributor), Liz Essley Whyte (Writer), Anna Wilde Mathews (Writer)

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Financial Relevance: Yes
Financial Markets Impacted: The lawsuit will impact the pharmacy-benefit managers (PBMs) such as UnitedHealth Group’s OptumRx, Cigna Group’s Express Scripts and CVS Health’s Caremark, which handle around 80% of U.S. prescriptions.
Financial Rating Justification: The article discusses the Federal Trade Commission’s plan to sue the largest three pharmacy-benefit managers over their pricing tactics for drugs including insulin, which will have a direct impact on these companies and their financial operations.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.wsj.com