The Fed­er­al Trade Com­mis­sion vot­ed unan­i­mous­ly yes­ter­day (5-0) to adopt a new pol­i­cy specif­i­cal­ly tar­get­ing ris­ing in­sulin prices, but al­so putting drug com­pa­nies and the PBM mid­dle­men on no­tice that pay­ing re­bates and fees to ex­clude cheap­er gener­ics can vi­o­late com­pe­ti­tion and con­sumer pro­tec­tion laws. 

The FTC cites in­sulin as “one promi­nent ex­am­ple of a pre­scrip­tion drug im­pact­ed by high re­bates and fees to PBMs and oth­er in­ter­me­di­aries,” as a year’s sup­ply of in­sulin has risen to near­ly $6,000, with out-of-pock­et costs av­er­ag­ing $1,288 for unin­sured pa­tients and $613 for in­sured pa­tients as of 2017. And those num­bers have on­ly gone up in the five years since.

“Pay­ing or ac­cept­ing re­bates or fees in ex­change for ex­clud­ing low­er-cost drugs may vi­o­late Sec­tion 2(c) of the Robin­son-Pat­man Act, which pro­hibits pay­ments to agents, rep­re­sen­ta­tives, and in­ter­me­di­aries who rep­re­sent an­oth­er par­ty’s in­ter­ests in con­nec­tion with the pur­chase or sale of goods,” the pol­i­cy state­ment says. “The Com­mis­sion has a long his­to­ry of ad­dress­ing com­mer­cial bribery and will con­tin­ue to do so.”

Sep­a­rate­ly, the FTC al­so opened an in­ves­ti­ga­tion in­to PBMs’ an­ti­com­pet­i­tive ac­tions. The FTC again vot­ed unan­i­mous­ly ear­li­er this month to re­quire the six largest PBMs — CVS Care­mark, Ex­press Scripts, Op­tum­Rx, Hu­mana, Prime Ther­a­peu­tics and Med­Im­pact Health­care Sys­tems — to pro­duce in­for­ma­tion and records on their deal­mak­ing.

In ver­bal re­marks yes­ter­day, FTC chair Lina Khan said, “PBMs and oth­er mid­dle­men may ex­clude the low­est-cost gener­ic and biosim­i­lar drugs from pa­tients’ for­mu­la­ries en­tire­ly to max­i­mize re­bates and fees. Such prac­tices vi­o­late the fun­da­men­tal bar­gain at the cen­ter of the Amer­i­can pre­scrip­tion drug sys­tem, which is that brand drugs are giv­en a pe­ri­od of patent ex­clu­siv­i­ty that is then fol­lowed by free and fair com­pe­ti­tion from gener­ic or biosim­i­lar al­ter­na­tives at dra­mat­i­cal­ly low­er prices.”

Oth­er FTC com­mis­sion­ers like re­cent­ly sworn-in Al­varo Bedoya took to Twit­ter yes­ter­day fol­low­ing the vote to ex­plain this lat­est pol­i­cy move:

1/ In a com­pet­i­tive mar­ket, com­pa­nies com­pete to low­er prices. It ap­pears that in the in­sulin mar­ket, com­pa­nies com­pete to *raise* prices. pic.twit­ter.com/iU8Is­SxZ­su

— Al­varo Bedoya (@Bedoy­aFTC) June 16, 2022

He al­so sought to ex­plain the unique use of the law that the FTC wants to re­turn to, af­ter it fell in­to dis­use in re­cent years.

7/ Robin­son-Pat­man was once a cor­ner­stone of an­titrust en­force­ment — the “Magna Car­ta of Small Busi­ness.” It has its flaws, but for decades it has fall­en in­to com­plete dis­use. To­day @FTC is say­ing that we have not for­got­ten about Robin­son-Pat­man.

— Al­varo Bedoya (@Bedoy­aFTC) June 16, 2022

And FTC com­mis­sion­er Re­bec­ca Kel­ly Slaugh­ter, for­mer­ly pol­i­cy coun­sel to Sen­ate Ma­jor­i­ty Leader Chuck Schumer (D-NY), al­so high­light­ed in her state­ment three is­sues she thinks this pol­i­cy state­ment will ad­dress:

1. In­sulin, which “is a case study in the con­stel­la­tion of chal­lenges that sur­round Amer­i­ca’s health­care cri­sis – ac­cess, eq­ui­ty, in­ter­me­di­aries, in­ter­change­abil­i­ty, and patent ever­green­ing, to name a few. The sto­ries we have heard about di­a­bet­ics risk­ing their lives by for­go­ing pricey in­sulin are noth­ing short of hor­ri­fy­ing.”
2. The FTC “should con­sid­er the­o­ries that en­com­pass the full breadth of the FTC’s au­thor­i­ty, both com­pe­ti­tion and con­sumer pro­tec­tion re­lat­ed. On the com­pe­ti­tion side, this in­cludes con­duct that vi­o­lates Sec­tion 5’s pro­hi­bi­tion on un­fair meth­ods of com­pe­ti­tion, or that may vi­o­late the Robin­son-Pat­man Act.”
3. The path to “un­tan­gling the prob­lem of high drug prices” is paved by mul­ti­ple stake­hold­ers. “While to­day’s Com­mis­sion State­ment fo­cus­es on PBMs, I want to be clear that phar­ma­ceu­ti­cal man­u­fac­tur­ers and oth­er mar­ket par­tic­i­pants are not off the hook if they have vi­o­lat­ed the law,” she wrote.