By Jody Godoy and Mariam Sunny
July 10 - The U.S. Federal Trade Commission is planning to sue UnitedHealth, Cigna and CVS Health over their tactics as middlemen in negotiating prices for drugs including insulin, a person familiar with the matter told Reuters on Wednesday.
The three companies own the largest pharmacy benefit managers, or PBMs, which are being investigated for how the rebates, or volume-based discounts, that they negotiate with drug manufacturers influence drug access and pricing.
On Tuesday, the FTC issued an interim report, saying the three biggest middlemen - managing 79% of U.S. prescription drug claims - have used years of dealmaking to gain outsized influence on drug prices. The report said the companies enriched themselves at the expense of smaller pharmacies and consumers.
UnitedHealth's Optum unit, CVS Health's CVS Caremark and Cigna's Express Scripts all disputed the report's findings.
On Wednesday, CVS said that the company intends to defend itself vigorously. UnitedHealth declined to comment, while Cigna was not immediately available for comment.
"Any action that limits the use of these PBM negotiating tools would reward the pharmaceutical industry and return the market to a broken state, leaving American businesses and patients at the mercy of the prices drugmakers set," a CVS spokesperson said.
{{/usCountry}}"Any action that limits the use of these PBM negotiating tools would reward the pharmaceutical industry and return the market to a broken state, leaving American businesses and patients at the mercy of the prices drugmakers set," a CVS spokesperson said.
{{/usCountry}}Shares of CVS closed marginally lower. Cigna ended marginally up, while UnitedHealth closed 1.8% higher.
The FTC is also looking at drugmakers as part of the insulin probe, the source said. The three largest insulin makers include Sanofi, Novo Nordisk and Eli Lilly .
Sanofi said its pricing practices have always complied with the law and that the company is committed to helping patients access the medicine they need at the lowest possible price.
Novo and Lilly did not immediately respond to Reuters' requests for comment.
The Wall Street Journal first reported the FTC's plans.
U.S. President Joe Biden's signature legislative achievement, the Inflation Reduction Act, has capped insulin prices for government-backed Medicare insurance recipients at $35 per month but the law does not extend to patients with private insurance or without insurance from higher prices.
As of 2023, around 8.4 million people in the United States with diabetes used insulin, according to the American Diabetes Association.
This article was generated from an automated news agency feed without modifications to text.