According to the FTC, drug brokers are illegally driving up the cost of insulin

U.S. regulators accuse the country's three largest pharmacy benefit managers of illegally driving up the cost of insulin in the United States while making it harder for patients to obtain cheaper versions of the life-saving drug.

The companies – CVS-owned Caremark Rx, Cigna Group's Express Scripts and UnitedHealth Group's Optum Rx – had hindered industry competition in insulin preparations through their actions, including by using unfair discounting practices, the Federal Trade Commission said on Friday.

This artificially inflated the list price of insulin and created a “drug discount system that favors deep discounts,” the FTC claimed when it announced lawsuits against the three companies and their subsidiaries.

Pharmacy benefit managers, also called PBMs, manage drug plans for health insurance programs such as Medicare and act as intermediaries between pharmacies, employers and drug manufacturers. Caremark, Express Scripts and Optum together manage about 80 percent of all prescriptions in the United States, according to the FTC.

“Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, the cost of insulin medications has skyrocketed over the past decade, in part due to powerful PBMs and their greed,” Rahul Rao, deputy director of the FTC's Bureau of Competition, said in a statement. “Caremark, ESI and Optum – as drug gatekeepers – have extorted millions of dollars off the backs of patients who need life-saving medications.”

Patient advocates, lawmakers and other critics have long accused PBMs of driving up drug costs, but the companies say they help keep health care spending under control and pass the savings on to their clients.

CVS Caremark and Optum denied the FTC’s allegations.

“CVS Caremark is proud of the work we have done to make insulin more affordable for all Americans with diabetes. To suggest otherwise, as the FTC did today, is simply wrong,” the company said in a statement to CBS News.

A CVS spokesperson also said the company has a history of protecting patients from rising prescription drug prices and has “taken a leadership role in lowering insulin costs for all patients.”

According to the company, CVS members pay an average of less than $25 for insulin and also negotiate deep discounts for their customers.

Optum called the FTC’s allegations “unfounded.”

“Optum Rx has negotiated aggressively and successfully with drug manufacturers for many years and taken additional steps to lower the cost of prescription insulin for our health insurance customers and their members, who now pay an average of less than $18 per month for insulin,” the company said in a statement to CBS News.

According to Express Scripts, the FTC has chosen to “ignore the facts and score political points instead of focusing on its duty to protect consumers.”

Significantly higher costs in the USA

In the United States, the cost of insulin has skyrocketed over the past two decades, leaving many Americans unable to afford the cost of treatment, forcing some to ration the drug or forgo treatment altogether.

According to the American Diabetes Association, the cost of insulin in the United States rose 24 percent between 2017 and 2022, adjusted for inflation. But compared to costs in 33 developed countries around the world, the gross price of insulin in the United States is on average more than 900 percent higher, according to a February RAND report.

Even after taking into account discounts from pharmaceutical companies, the cost of insulin in the United States is more than twice as high as in comparable countries, the nonprofit think tank found.

“Insulin prices in the United States have been rising for many years and are significantly higher than in other middle- and high-income countries,” Andrew Mulcahy, the study's lead author and senior health economist at RAND, said in the report..

—The Associated Press contributed to this report