FTC settles lawsuit with CVS Caremark over insulin prices

Ed’s stories explore prescription drug pricing, affordability and access, as well issues surrounding patents, litigation, and legislation. He is also the author of the morning Pharmalittle newsletter and the afternoon Pharmalot newsletter.

The Federal Trade Commission settled a lawsuit against CVS Caremark, one of the largest pharmacy benefit managers in the U.S., over allegations that the company artificially inflated the price of insulin and impeded access to the lifesaving diabetes treatment.

As part of the deal, which the agency maintained will save Americans up to $8.5 billion in out-of-pocket costs over 10 years, CVS Caremark, which is owned by CVS Health, must make several changes to its dealings with employers, health plans, and pharmacies. The FTC also estimated the deal will unlock up to $4.5 billion in further savings for patients through pharmacy counter rebates.

In its complaint, the FTC alleged that CVS Caremark — as well as Cigna’s Express Scripts and UnitedHealth’s Optum Rx — created a “perverse” system of rebates that favored insulin, which was then sold at higher list prices in order to “line their pockets” at the expense of patients who were forced to pay more for the medication.