Texas Attorney General Sues Insulin Manufacturers and PBMs for Price-Fixing

This legal action comes amid growing scrutiny of the pharmaceutical industry and PBMs, which manage prescription drug benefits for insurers. The lawsuit asserts that insulin, which costs less than $2 to produce, has skyrocketed in price from $20 per vial in the late 1990s to between $300 and $700 today. Paxton’s complaint highlights a troubling pattern where PBMs prioritize higher list prices for insulin to secure rebates from manufacturers, thereby exacerbating costs for patients. This case is part of a broader investigation into anti-competitive practices within the pharmaceutical sector, with the Federal Trade Commission (FTC) also pursuing similar allegations against these companies.

Background on Pricing Practices

• Allegations of Collusion: The lawsuit alleges that insulin manufacturers and PBMs engaged in an unlawful scheme, where manufacturers raised prices while PBMs received undisclosed payments for preferential treatment of certain products.
• Impact on Patients: The inflated prices have placed a significant burden on diabetes patients, who rely on insulin for their health and well-being.

Related FTC Actions

The FTC has also filed a complaint against CVS, Cigna, and UnitedHealth for anti-competitive practices that inflate insulin prices. These PBMs control a substantial portion of the U.S. prescription market, which raises concerns about their influence on drug pricing and patient access to essential medications.

Ongoing Developments

As the lawsuit progresses, CVS and UnitedHealth have requested the recusal of FTC Chair Lina Khan and other commissioners, citing perceived bias against PBMs. This request underscores the contentious nature of the ongoing investigations and lawsuits surrounding drug pricing and the roles of pharmaceutical companies and PBMs in the healthcare system.