The U.S. Federal Trade Commission is planning to sue UnitedHealth, Cigna, and CVS Health over their tactics as middlemen in negotiating prices for drugs including insulin, a person familiar with the matter said.

The three companies own the largest pharmacy benefit managers (PBMs) which are being investigated for the rebates, or volume-based discounts, they negotiate with drug manufacturers, and how these influence drug access and pricing.

CVS said the company intends to defend itself vigorously. UnitedHealth declined to comment; Cigna was not immediately available for comment.

"Any action that limits the use of these PBM negotiating tools would reward the pharmaceutical industry and return the market to a broken state, leaving American businesses and patients at the mercy of the prices drugmakers set," a CVS spokesperson said.

The FTC is also looking at drugmakers as part of the insulin probe, the source said. The three largest insulin makers include Sanofi, Novo Nordisk, and Eli Lilly.

Sanofi said its pricing practices have always complied with the law and that the company is committed to helping patients access the medicine they need at the lowest possible price.

Novo declined to comment, and Lilly did not immediately respond to request for comment.

U.S. President Joe Biden's Inflation Reduction Act capped insulin prices for government-backed Medicare insurance recipients at $35 per month but that cap does not apply to patients with private insurance or without insurance.

Americans without health insurance pay an average of $98 for Eli Lilly’s generic insulin despite the company’s May 1 pledge to cut its list price to $25 per vial, according to a survey of more than 300 U.S. pharmacies by U.S. Senator Elizabeth Warren’s office released a year ago.

As of 2023, around 8.4 million people in the United States with diabetes used insulin, according to the American Diabetes Association.

The FTC issued an interim report, saying the three biggest middlemen - managing 79% of U.S. prescription drug claims - have used years of dealmaking to gain outsized influence on drug prices. The report said the companies enriched themselves at the expense of smaller pharmacies and consumers.

UnitedHealth's Optum unit, CVS Health's CVS Caremark and Cigna's Express Scripts all disputed the report's findings.