Entrepreneur Mark Cuban, founder of Cost Plus Drugs, is underwhelmed with the settlement the Federal Trade Commission reached with Express Scripts earlier this week. "My initial response to the FTC PBM settlements. meh," he posted on LinkedIn. "Great intent. Will not accomplish the goal."
The settlement resolves a lawsuit alleging that Express Scripts and affiliated entities, referred to collectively as ESI, had artificially inflated the list price of insulin drugs by using anticompetitive and unfair rebating practices. It also said the PBM impaired patients' access to lower list price products, ultimately shifting the cost of high insulin list prices to vulnerable patients. The FTC expects the settlement to reduce out-of-pocket costs for drugs such as insulin by up to $7 billion over 10 years.
"The FTC's settlement with Express Scripts is a clear testament to the Trump-Vance FTC's focus on lowering health care costs for American patients," FTC Chair Andrew N. Ferguson said. "The FTC's settlement with ESI will end its business practices that have kept drug prices high, ultimately providing meaningful financial relief to American patients who depend on ESI to access life-sustaining prescription drugs, as well as community pharmacies who will see new revenues each year and relief from being squeezed."
Cuban, however, enumerated several concerns about the terms of the settlement:
- "If the PBM convinces the employer to choose the current system, then they can do it just the way they always have."
- "Of course, if the sponsor overpays, they do that without the ability to collect what they overpaid. And there are no ends to claw backs of any kind, nor of using float."
- "In my opinion, the worst of all, wholesalers still buy from brand manufacturing at wholesale acquisition cost pricing, which means the entire economic foundation of brand drug pricing is inflated."
"If you require wholesalers to work at net, then rebates can't be added back in, cash out of pocket for everyone is at net and it's a lot easier to find and track where the big insurance companies are ripping off patients, pharmacies and sponsors," he said. "Would anyone be shocked if consultants and brokers got bonuses for using last year's contracts? And of course, sponsors and pharmacies will still have confidentiality clauses."
Cuban founded Cost Plus Drugs in 2022 with a stated goal of lowering prices for generic drugs by removing middlemen such as PBMs and by moving to a cost-plus pricing strategy.
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