FTC Halts Lawsuit Against Major PBMs Amid Internal Shake-Up

The Federal Trade Commission (FTC) has temporarily suspended its legal challenge against leading pharmacy benefit managers (PBMs), citing an absence of commissioners able to participate in the proceedings. According to Fierce Healthcare, the agency has filed an order requesting an administrative stay, effectively pausing the case while leadership issues are resolved.

The decision comes as the FTC grapples with a leadership vacuum. The two remaining commissioners, Republicans Andrew Ferguson and Melissa Holyoak, have recused themselves from the matter, leaving the commission without a quorum to move forward. Per Reuters, the stay will remain in place for at least 105 days, with an evidentiary hearing scheduled 225 days after the stay is lifted.

The leadership shake-up stems from the firings of Democratic Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter by former President Donald Trump in March. Both are currently suing the White House in an attempt to regain their positions. Additionally, former FTC Chair Lina Khan, a driving force behind the agency’s recent antitrust actions under President Joe Biden, stepped down when Trump assumed office.

Related: FTC Seeks Delay in PBM Case Over Alleged Insulin Price Gouging

The lawsuit, originally filed in September, targets the so-called “Big Three” PBMs—CVS Caremark, Optum Rx, and Express Scripts—alleging that they employ anticompetitive tactics that artificially inflate the price of insulin. According to Fierce Healthcare, each of these companies is vertically integrated with a major health insurer: CVS Caremark operates under CVS Health alongside Aetna, Optum Rx is part of UnitedHealth Group, and Express Scripts is a unit of Cigna’s Evernorth.

The FTC contends that these PBMs incentivize pharmaceutical manufacturers to raise drug prices in order to secure better placement on insurance formularies, effectively increasing the rebates paid to the PBMs. In response, the PBMs countersued in November, arguing that the FTC is overstepping its regulatory authority and that pharmaceutical companies—not benefit managers—are responsible for soaring drug costs.

This legal battle follows an extensive FTC probe into the PBM industry, examining pricing strategies, the effects of vertical integration, and the role of group purchasing organizations. The absence of a functioning FTC leadership structure has left the case in limbo, despite PBM reform gaining bipartisan support, including backing from Trump himself.

Source: Fierce Healthcare