Washington, D.C. — In response to the news that the Federal Trade Commission (FTC) has paused its lawsuit against the three largest pharmacy benefit managers (PBMs) for engaging in an allegedly illegal rebate scheme that inflated insulin list prices, the American Economic Liberties Project released the following statement.

“President Donald Trump’s attempted firings of FTC Commissioners Alvaro Bedoya and Rebecca Slaughter have jeopardized the agency’s critical work to enforce antitrust laws and protect consumers, workers, and small businesses from monopoly power – including the FTC’s lawsuit against the ‘Big Three’ PBMs,” said Emma Freer, Senior Policy Analyst for Health Care at the American Economic Liberties Project. “This case is a lifeline to all those harmed by PBMs’ unfair and abusive business practices, including vulnerable patients, who increasingly cannot afford essential medications; independent pharmacies, which are closing in droves; employers and other health plan sponsors, which are cutting wages and employee benefits to offset rising prescription drug costs; and taxpayers, who often foot the bill. These Commissioners must be allowed to return to work — each day of delay needlessly puts patients’ lives at risk.”

The FTC’s September 2024 administrative complaint alleges that CVS Health’s Caremark, Cigna Group’s Express Scripts, and UnitedHealth Group’s OptumRx – the “Big Three” PBMs, which account for nearly 80% of U.S. prescription drug claims – engaged in “anticompetitive and unfair rebating practices” that drove up insulin list prices, blocked access to more affordable generic alternatives, and shifted costs to vulnerable patients who need insulin to survive. The FTC is using its enforcement authority under Section 5 of the FTC Act, which prohibits unfair methods of competition and unfair acts or practices, to bring this complaint.

The alleged rebate scheme began in 2012, with the creation of exclusionary drug formularies. Consolidated PBMs leveraged their market power during price negotiations with drug manufacturers, demanding ever-increasing rebates in exchange for preferred formulary placement and excluding competing products, such as cheaper generic equivalents. One Novo Nordisk said that PBMs were “addicted to rebates,” according to the FTC’s complaint.

As a result of these rebating practices, insulin prices soared. For example, one brand-name drug – Novo Nordisk’s Novolog U-100 – more than doubled in price, from $122.59 in 2012 to $289.36 in 2018. PBMs pocketed these rebates instead of passing them along to patients, as they claimed to do. Consequently, vulnerable patients owed more – or could not afford to access – life-saving medications.

After Trump attempted to fire FTC Commissioners Alvaro Bedoya and Rebecca Slaughter, the Big Three PBMs requested to stay the administrative proceedings because, with the agency’s remaining members – Chair Andrew Ferguson and Commissioner Melissa Holyoak – recused, “there are currently no sitting Commissioners able to participate in this matter.” On April 1, the FTC granted this request for at least 105 days.

Learn more about Economic Liberties’ Break Up Big Medicine initiative to address healthcare consolidation here.

Learn more about Economic Liberties here.