Patient advocates say a federal lawsuit against Express Scripts could lower drug prices

Lower drug price advocates say a federal lawsuit filed this month against St.-based Express Scripts Louis and two other companies may result in the introduction of drugs that are cheaper for patients.

Federal Trade Commission on September 20 filed an administrative complaint against a pharmacy benefits manager, accusing it and two other companies, OptumRx and Caremark, of artificially inflating insulin prices at the expense of patients.

“Insulin is a prime example of Respondents’ flawed drug pricing system,” the FTC wrote in its complaint. “It is time to put an end to Respondents’ unfair and unlawful business practices and prevent them from happening again.”

Pharmacy benefits managers negotiate with drug manufacturers and insurance companies to set drug prices for patients. They do this by deciding which drugs to include on a list of medications, called a formulary, that are covered by insurance.

Because drugmakers want their drugs on the lists, they offer discounts to companies through benefits managers. The lawsuit claims that companies select more expensive insulins to include in their plans, ignoring cheaper options and pocketing steep discounts from manufacturers.

The companies deny these reports. Express Scripts officials could not be reached for comment. But in a statement, they called the FTC’s actions “baseless” and “ideologically driven.”

“The fact is that in the unlikely event that the FTC wins its case and forces PBMs to include drugs on formularies…the FTC will drive up drug prices in this country,” Andrea Nelson, chief legal officer of Cigna Group, which owns Express Scripts, – wrote in the press release. “This will harm consumers and providers of prescription drug benefits – including employers, labor unions, and the federal government itself.”

Express Scripts officials said in a statement that the federal agency is ignoring the service he’s been trying for a long time persuade insurers to cover cheaper drugs.

The FTC complaint shows that federal regulators are beginning to take seriously complaints about the business practices of pharmaceutical fund managers, said Benjamin Jolley, a Salt Lake City pharmacist and member of the American Economic Liberties Project who advocates for antitrust laws.

Jolley, who has seen insulin costs rise rapidly during his career, called the rebate system a legal type of bribe.

But the lawsuit shows the government is becoming more aggressive toward the industry, he said.

“I think we can look at insulin as a test case,” Jolley said. “Is this blanket rebate system generally legal or illegal? Is this permissible under antitrust regulations? The FTC says no, that’s not the case.”

The Federal Trade Commission lawsuit is the latest in a series of lobbying battles between federal regulators and benefits managers. In July, the FTC published the report which called the companies “powerful middlemen that inflate drug prices and oppress Main Street pharmacies.”

Both the FTC and patient advocates say Express Scripts and other companies are not solely to blame for high drug prices.

Drugmakers also influence prices, said Shaina Kasper, executive director of the nonprofit Diabetes T1 International.

“Pharmacy benefit managers are also complicit in manipulating the market to raise prices, but let’s be clear: PBMs do not unilaterally set the price of insulin,” Kasper wrote in an email. “It’s time for these companies to stop profiteering and put people before profit. While we applaud the FTC for taking this step, we also hope to take additional actions that will move us closer to affordable and accessible insulin for all.”

Earlier this month, Express Scripts filed a defamation suit v. FTC in federal court in Missouri, maintaining that the claims in the July report are false and that the agency “failed to consider the value (companies) provide to consumers and patients.”

If the Federal Trade Commission finds that companies have broken the law, it can force them to include cheaper drugs in insurance plans. The commission could also prevent companies from accepting compensation based on the drug’s wholesale list price.

“I think if you remove the incentives to distort drug prices, we create a more level playing field,” said Loretta Boesing, founder of the Missouri-based advocacy group Unite for Safe Medications.

He hopes the insulin suit will reduce the cost of other medications.

“Patients are harmed when they are forced to take a more expensive drug solely for the sake of PBM profits,” Boesing said. “Some patients have died because they left pharmacy counters empty-handed. “So I feel that if this lawsuit is successful and the FTC wins this case, it will change the future of our society, so I believe it will help lower drug costs for everyone.”

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