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"Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need lifesaving medications," said one agency leader.
The Federal Trade Commission on Friday initiated a legal process against middlemen that collectively administer about 80% of all prescriptions in the United States, accusing them of artificially inflating the list price of insulin drugs and blocking patients from accessing cheaper products.
The FTC action targets the "Big Three" pharmacy benefit managers (PBMs): CVS Health's Caremark Rx, Cigna's Express Scripts (ESI), and UnitedHealth Group's OptumRx. It also involves their affiliated group purchasing organizations (GPOs): Zinc Health Services, Ascent Health Services, and Emisar Pharma Services.
"Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed," said Rahul Rao, deputy director of the FTC's Bureau of Competition.
"Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need lifesaving medications," Rao continued. "The FTC's administrative action seeks to put an end to the Big Three PBMs' exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers."
The FTC's vote to begin the legal process by filing a complaint was 3-0. Led by Chair Lina Khan, the Democrats supported the move while the two Republicans, Commissioners Melissa Holyoak and Andrew N. Ferguson, recused.
The American Prospect executive editor David Dayen noted that "the complaint, which was filed in an administrative court, has not yet been made public, as it is undergoing redactions. Agency officials expect it to be made public on Monday."
However, in a statement after the vote, the FTC shared some details about the complaint's arguments that "Caremark, ESI, and Optum and their respective GPOs engaged in unfair methods of competition and unfair acts or practices under Section 5 of the FTC Act by incentivizing manufacturers to inflate insulin list prices, restricting patients' access to more affordable insulins on drug formularies, and shifting the cost of high list price insulins to vulnerable patient populations."
Rao emphasized that while the commission on Friday "exercised its discretion to move forward with suing only the PBMs and GPOs now, FTC staff's investigation has also shed light on the concerning and active role that the insulin manufacturers—Eli Lilly, Sanofi, and Novo Nordisk—play in the challenged conduct."
"All drug manufacturers should be on notice that their participation in the type of conduct challenged here can raise serious concerns, with a potential for significant consumer harm, and that the Bureau of Competition reserves the right to recommend naming drug manufacturers as defendants in any future enforcement actions over similar conduct," he said.
Emma Freer, senior policy analyst for healthcare at the American Economic Liberties Project, pointed out that "the FTC's case adds to the mounting, bipartisan criticism of the 'Big Three' PBMs, which for far too long have exploited their monopoly power to inflate drug prices and enrich shareholders at the expense of patients' health and pocketbooks."
"The lawsuit also exposes their industrywide abuse, using insulin—the price of which has soared over 1,200% since 1999—as a flagship example of how PBMs' rebate schemes distort markets and drive up costs for lifesaving drugs," Freer said. "While PBMs bear much of the blame, the FTC is right to also put brand-name manufacturers like Eli Lilly, Novo Nordisk, and Sanofi on notice for their role in this crisis. We're thrilled to see the commission bring this long overdue challenge against healthcare's most notorious middlemen, and hope to see it result in concrete reform and accountability."
As The New York Times reported:
Just weeks before the presidential election, the agency is tackling an issue that Vice President Kamala Harris has signaled an interest in. Campaigning at a community college in Raleigh, North Carolina, in August, Ms. Harris promised to "demand transparency from the middlemen who operate between Big Pharma and the insurance companies, who use opaque practices to raise your drug prices and profit off your need for medicine."
Former President Donald J. Trump has not campaigned on the issue, but in 2018, his administration proposed a sweeping change that would have threatened the benefit managers' business model. The proposal was never enacted. Mr. Trump's administration also created a model for capping Medicare patients' out-of-pocket costs for some insulin products that was later expanded under President [Joe] Biden.
The Times also noted that "some Republicans in Congress have proposed curbing some of the benefit managers' business practices. But other top Republicans have defended PBMs and said the FTC is overreaching."
Among the GOP's critics of PBMs is House Committee on Oversight and Accountability Chairman James Comer (R-Ky.), who highlighted his panel's investigations into the companies and praised the FTC move.
Another leading congressional critic of PBMs—and the country's failing for-profit healthcare system more broadly—is Senate Committee on Health, Education, Labor, and Pensions (HELP) Chair Bernie Sanders (I-Vt.), who caucuses with Democrats.
After a public pressure campaign led Eli Lilly, Novo Nordisk, and Sanofi to cut list prices of insulin products last year, Sanders held a hearing with their CEOs as well as PBM executives. At the time, he welcomed the voluntary reductions but also stressed that as "Americans pay outrageously high prices for prescription drugs, the pharmaceutical industry and the PBMs make enormous profits."
While the FTC's Friday action was widely praised—other than by the PBMs, who denied the allegations—some advocates hope the commission and other decision-makers will go even further in the future.
Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, called PBMs "some of the most predatory corporations in healthcare" and highlighted that "these companies have incredibly long rap sheets and convictions at the state level."
"I'm thrilled the FTC is going after these criminal enterprises," she said. "I hope this lawsuit, with its focus on kickbacks, is just the beginning. We also need action on how PBMs harm local pharmacies. Ultimately, these corporations need to be broken up."
Organizer March for Our Lives said the statewide walkouts "speak to the urgency and frustration young people feel after yet another shooting has been met with only 'thoughts and prayers.'"
Joined by educators, parents, and gun control advocates, thousands of Georgia students on Friday staged a classroom walkout organized by the youth-led March for Our Lives "to demand a future free from gun violence" following the September 4 mass shooting at Apalachee High School in Winder, the deadliest such event in the state's history.
March for Our Lives (MFOL)—which was founded in the wake of the 2018 massacre at Marjory Stoneman Douglas High School in Parkland, Florida—said that Friday's walkouts "speak to the urgency and frustration young people feel after yet another shooting has been met with only 'thoughts and prayers.'"
Two Apalachee students—Mason Schermerhorn and Christian Angulo, both age 14—and teachers Richard Aspinwall and Cristina Irimie were shot dead by a 14-year-old armed with an AR-15-style semi-automatic rifle. Nine others were wounded in the attack.
The shooter was arrested and charged with four counts of murder. His father, Colin Gray, was also arrested and charged with four counts of involuntary manslaughter, two counts of second-degree murder, and eight counts of cruelty to children for purchasing the gun used in the shooting and giving it to his son.
"Across Georgia, Republican leaders—like those who control the majority on the Cobb Board of Education and both chambers of the Georgia General Assembly—refuse to take commonsense action to protect our communities and our lives from preventable gun violence," MFOL said.
The group continued:
We will never allow our elected officials to forget the senseless act of violence that could have been prevented at Apalachee High School. We will honor the lives of Cristina Irimie, Christian Angulo, Mason Schermerhorn, and Richard Aspinwall with action. Everyone has the fundamental right to feel safe in our schools and our communities, and we will continue to fight until that freedom is a reality for all.
Guns are the No. 1 killer of children and teens in our country, and far too many educators and students go to school with the daily fear that their community could be next. This failure is a choice that our leaders are making for us. Today, we join organizers and students from over 30 high schools all across Georgia in calling on Gov. Brian Kemp, Lieutenant Gov. Burt Jones, and the Georgia General Assembly to commit their support for the passage of the Pediatric Health Safe Storage Act at the start of the 2025 legislative session.
"The Georgia General Assembly and Gov. Brian Kemp, the sad truth is that they have made us feel less safe," said Saif Hasan, a senior at Lambert High School and county organizing deputy director at the Georgia Youth Justice Coalition who led hundreds of students in a walkout on Friday.
"This weekend, we're going to be out knocking doors in Suwanee, Roswell, and East Cobb to help elect new leaders who will build the future we deserve," Hasan added. "We're going to be out talking to Georgians about safe storage to make sure kids my age are never scared to go to school."
Apalachee High School junior Sasha Contreras said during a Friday walkout rally in Gwinnett that "I wasn't going to speak today but seeing and hearing everyone's courage in showing up today and taking action made me realize that my voice was important."
"There is nothing being done to prevent such a tragedy from occurring again. As a student that has [Advanced Placement] exams at the end of the school year as well as leadership positions, I understand the importance of going back to school," Contreras added. "However, many of my peers including myself feel anxious about returning with no preventative measures in place."
March for Our Lives director of organizing Gaby Salazar said that "we are so proud to support this student-led action, but heartbroken that we keep having to walk out of our classes again and again to get our leaders to listen to us."
"Guns kill more kids than any other cause in the state of Georgia," Salazar added. "More than cancer, more than car accidents. Even though a sweeping majority of Americans support commonsense gun laws, we know it's an uphill battle to convince state lawmakers to value our lives over the gun lobby's money. But young people in Georgia will not stop fighting until gun violence is a relic of the past."
One expert warned that requiring hand-counted ballots "could plunge the vote counting process into chaos and give Republicans yet another pretext not to certify the results" if Vice President Kamala Harris wins Georgia.
Forty-five days before U.S. elections and less than a month before early voting begins, former President Donald Trump's allies on the Georgia State Election Board on Friday passed a rule requiring county officials in the key swing state to count all ballots by hand, a move one expert said could "be exploited by election deniers" like Trump, the 2024 Republican nominee.
The board's pro-Trump majority voted 3-2 in favor of requiring hand counts, with Chair John Fervier, an Independent, casting one of the two dissenting votes.
"The overwhelming number of election officials that have reached out to me have been opposed to this," Fervier said in a statement. "There are several things that concern me about this. No. 1, I do think it's too close to the election. I do. I think that it's too late to train a lot of poll workers that have already started their training processes."
Fervier also said the board overstepped its authority by passing the new rule.
"This board is an administrative body, not a legislative body," he explained. "If the Legislature had wanted this, they would have put it in the statute. This board is not here to make law. We're here to interpret law, and I don't see any place in statute, where [it mentions] hand counting the ballots after they come out of the machines."
Sara Tindall Ghazal, the board's lone Democrat, told Mother Jones' Ari Berman that "we're so far off the deep end of sanity here."
"It's a terrible, terrible idea to do this sort of thing with no notice, no training," she added.
Berman warned that the rule change "could plunge the vote counting process into chaos and give Republicans yet another pretext not to certify the results" if Vice President Kamala Harris, the Democratic nominee, wins the state. He added that the new rule could even help Republicans "rig the state for Trump."
Trump, who lost Georgia to President Joe Biden by less than half a percentage point in 2020, infamously asked Republican Georgia Secretary of State Brad Raffensperger to "find 11,780 votes" in his favor. This prompted Democratic Fulton County District Attorney Fani Willis to launch an investigation that led to 13 criminal counts against Trump and numerous alleged co-conspirators for violations of the state's Racketeer Influenced and Corrupt Organizations (RICO) Act related to their participation in a sprawling "criminal enterprise" aimed at overturning the election.
In June, the Georgia Court of Appeals paused the case, in which judges have dismissed multiple counts against Trump and his co-defendants, four of whom have pleaded guilty.
Republican Georgia officials including Raffensperger and Attorney General Chris Carr have also voiced concerns about hand counts.
However, Janelle King, a board member who supports Trump, said Friday that "what I don't want to do is set a precedent that we are OK with speed over accuracy."
Voting rights advocates decried the new rule.
"By mandating hand counts that can magnify discrepancies and potentially delay results, the Georgia State Election Board has taken another dangerous step to create doubt in our election process where there should be none," Kristin Nabers, Georgia state director at the advocacy group All Voting Is Local—which warned that the board is "purposely setting up [the] system to fail"—said in a statement Friday.
"Counting thousands of ballots by hand will be an incredibly tedious, expensive, and possibly error-prone process," she continued. "Any human errors can be exploited by election deniers to sow distrust and decrease confidence in our elections and in the hard-working election officials that run them."
"Many election workers have spoken recently about the threats they are facing from the conspiracy theorists who refuse to believe that our elections are fair, and these rules just add fuel to that fire," Nabers related.
"Implementing these drastic changes less than a month before the start of early voting means counties may have to restart their training of poll workers," she added. "These unnecessary hand counts are setting the county election offices up for failure. Today, we witnessed the board allow election deniers to complicate elections in the Peach State even further with their baseless conspiracy theories."
Lisa Gilbert, co-president of the consumer advocacy group Public Citizen, said that "instead of providing better access to the polls, extremists in Georgia are changing the rules just over a month before we elect new leaders."
"This new policy will only create more distrust of our safe and secure election system, burden election workers, and slow the vote count," she added.
It's not just Georgia. As Public Citizen noted Friday, "Since 2020, several states have implemented new voter restrictions to suppress turnout."
"Georgia, Texas, Montana, and Iowa have added new voter-restriction policies such as shortening early voting windows, requiring new voter registration if voters don't participate in the previous election, forbidding automatic mailing absentee ballot applications, and requiring IDs at the polls," the group noted. "States have also purged voter roles and even sued to try to prevent voter registration efforts."
In Georgia, which enacted a Republican-led voter suppression law in 2021, voters experienced a dramatic increase in mail-in ballot rejections during subsequent municipal elections.
As Common Dreams reported at the time, the law imposed strict voter identification requirements, significantly limited the use of absentee ballot drop boxes, eliminated mobile voting vans, and made it a crime to give water to people waiting in line to vote.