The U.S. Federal Trade Commission (FTC) said on Friday it has filed a lawsuit against the three largest pharmacy benefit managers (PBMs) in the country for artificially inflating prices of insulin drugs for their personal benefits and thus making the life saving drugs unaffordable for many patients.

In an attempt to reap personal profits, the three PBMs popularly known as 'The Big Three' who manage about 80 percent of all prescriptions in US-CVS Health's Caremark, Cigna's Express Scripts, Inc. (ESI), and United Health Group's Optum-have been engaged in 'unfair rebating practices' with drug manufacturers, thus declining the patients'access to 'lower list price products,' FTC said in a statement.

Though lower list price insulins were available, the PBMs intentionally chose drugs with a high list price and highly rebated insulin products.

These PBMs thus have "extracted millions of dollars off the backs of patients who need life-saving medications," Rahul Rao, Deputy Director of the FTC's Bureau of Competition, said in statement released on Friday.

"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,"Rao said.

Through its latest move, FTC is planning to end the 'exploitative conduct'of the PBMs and thus trying to'fix a broken system,'and lower the prices of insulin for patients in US, he said.

Cost of insulin drugs which was affordable once has alarmingly gone up due to the 'chase-the - rebate strategy' of the PBMs, FTC said.

Price of Eli Lilly's insulin medication Humalog went up from $21 in 1999 to $274 in 2017, making it unaffordable for a majority of (one out of every four) insulin patients by 2019. Meanwhile, the PBMs amassed billions as profit through rebates from the drug manufacturers.

FTC raised serious concerns over the part played by drug manufacturers Eli Lilly, Novo Nordisk and Sanofi in the act along with PBMs and found them equally responsible for shooting up prices of insulin over the past few years.

Percentage of a drug's list price decidesdrug rebates and fees, which are the two main sources of income of PBMs.So, by negotiating rebates and fee rates, the PBMs enter into a mutual contract with the drug manufacturers. PBMs favor medication with higher list prices as it generates higher rebates and fees for them.

The FTC's administrative complaint accused PBMs of earning millions of dollars in rebates and fees and using rebates to attract clients, mainly payers such as employers, labor unions and health insurers.

These payers and PBMs together later created pharmacy benefit management services like drug formularies or lists of prescription drugs covered by a health plan.This led to a rise in insulin list prices in 2012. To make huge profits through rebates, PBMs threatened drug manufacturers that they will omit certain drugs from the formulary.

To create a favorable formulary coverage and to get clients with commercial health insurance, the drug manufacturers started listening o the PBMs.

Thus,as the 'PBMs' rebate pressures' continued, the companies increased their list prices. List price of Novolog U-100 of Novo Nordisk doubled from $122.59 in 2012 to $289.36 in 2018.

Increasing insulin list prices and removing low list price insulins from formularies, have shifted burden to patients, FTC said.