Wow. This is literally THE EXACT SAME THING I went through last year. I liked this guy, we hung out a bunch, things were going well, then suddenly one of my best girlfriends got back from college and swooped in. I told her I liked him, and suddenly they're spending all their time together while I'm sitting there dumbfounded and hurt and her spineless bf has no idea.
I'll tell ya how this pans out: selfish people honestly just don't even think about other peoples feelings in the same way. Its not that they want to hurt you (in most cases), they just put their own pleasure above any pain they might cause others. Since they're not trying to be terrible, other people rarely pick up on it and you just look like the overeactive clingy bitch in the situation if you point it out (true story). So, they'll go on doing what they want and there's little you can do to stop it. You can just hope it catches up to them eventually or they have a change of heart. If you do try to point it out or stop it, you'll likely have little impact except making yourself look jealous or vindictive. If you tell her bf, the same thing will happen.
What I did (and the only thing you really can reasonably do while keeping your dignity), is choose to cut a toxic situation (and/or person), out of your life. In my case, I recognized that while I love my friend, I couldn't have someone with that much potential to hurt me in my circle. We're polite, but I don't go out of my way to be her friend anymore.
I would suggest cutting the guy out of your life as much as possible as well, but not in a way that would trouble you. Just keep it friendly and polite, but font give him openings to get in there and hurt you. If he's willing to basically help your friend cheat (at least emotionally), are you really interested in him anyway?
After several months went by, I did end up reconnecting with the guy and spilled everything to him, just to get it off my chest. It didn't help anything, but it made me feel better, and I like to think that its good for him to know how their actions impact others. My friend ended up breaking up with her bf in the end and basically using him (she doesn't want a relationship), which I predicted from the beginning, but some people just have to make their own mistakes in order to grow. They both work together now and I hang out with different people who don't jerk my emotions around and are very self aware. I hope you reach this point too.
Hope this helps!