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PBMs Push Back Against FTC, Filing Lawsuit Over Regulatory Actions

By  |  November 21, 2024

According to FiercePharma, the nation’s largest pharmacy benefit managers (PBMs) and group purchasing organizations have filed a lawsuit against the Federal Trade Commission (FTC), accusing the agency of unconstitutional overreach. Express Scripts, Caremark, and Optum Rx—PBMs owned by Cigna, CVS Health, and UnitedHealth Group, respectively—claim the FTC’s recent moves to reform their industry amount to unlawful “regulatory fiat.”

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    The legal action follows a September lawsuit by the FTC, which alleges PBMs and vertically integrated group purchasing organizations inflated insulin costs as intermediaries. While the FTC argues these companies harm consumers by driving up prices for essential drugs, PBMs counter that their practices lower net drug costs and instead blame manufacturers for high prices. The lawsuit further criticizes the FTC’s administrative process, describing it as subjective and undemocratic. PBMs claim the agency’s enforcement efforts would force them to renegotiate contracts, which they argue the FTC has no authority to regulate.

    Read more: FTC’s Watchdog Role in Pharma Mergers: Road Bumps and The Way Forward

    “This sweeping attempt to reshape an entire industry via law enforcement would never pass muster in a U.S. District Court,” the plaintiffs said, accusing the FTC of acting as “sole arbiters” of business practices.

    In response, FTC spokesperson Douglas Farrar defended the agency, accusing PBMs of deflecting from practices that harm patients. “It has become fashionable for corporate giants to argue the FTC is unconstitutional,” Farrar posted on X (formerly Twitter). “It will not work.”

    The FTC, led by Democratic Chair Lina Khan, has been under scrutiny itself, with the political landscape potentially shifting its direction under a future Trump administration.

    Source: FiercePharma