The Federal Trade Commission (FTC) is going after big pharma. According to FTC’s latest report, units of CVS Health Corp., Cigna Group and UnitedHealth Group Inc. charged significantly more than the national average acquisition cost for dozens of specialty generic drugs, bringing in more than $7.3 billion in “excess” revenue over six years.
The FTC said that this practice raised costs for consumers and insurers on important treatments for cancer, multiple sclerosis, HIV, organ transplants, and other conditions. The report shows how pharmacy benefit managers (PBMs) control many parts of the drug supply chain, according to an FTC official at a press briefing on Jan. 14.
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The FTC is a U.S. government agency responsible for promoting consumer protection and preventing anti-competitive practices. It works to ensure that businesses follow fair competition rules and protect consumers from deceptive, unfair, or anticompetitive behavior in the marketplace.
The agency typically handles issues related to unfair trade practices, false advertising, data privacy, and monopolistic behavior. It monitors industries such as healthcare, technology, and finance, where consumer interests may be at risk due to powerful market players or inadequate regulations.
The latest report comes as the FTC is preparing to file a lawsuit alleging the three companies failed to fully comply with the agency’s subpoenas, according to people familiar with the plans.
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However, CVS said it has complied with the FTC’s demands by providing more than 2 million documents and 7 terabytes of data. A company spokesman said the lawsuit appeared to be linked to CVS’s attempt to have commissioners of the FTC removed from a related case about insulin costs.
The companies might be dragging their feet when it comes to co-operating. The FTC has been reportedly unable to submit a final report as these companies have not submitted all the information they have requested. The investigation and lawsuit may bring to light the shady practices of PBMs.
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