Express Scripts, Caremark, OptumRx fight back in lawsuit against FTC
Photo: RiverNorthPhotography
Express Scripts, Caremark and OptumRx are suing the Federal Trade Commission for trying to “upend present day drug rebate contracts.”
The lawsuit was filed Tuesday, Nov. 19 in federal court in Missouri.
It stems from an FTC lawsuit against the same PBMs, – the country”s three largest – over insulin prices.
The FTC brought the lawsuit in September, claiming the PBMs and their affiliated group purchasing organizations (GPOs) engaged in anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products and shifted the cost of high insulin list prices to vulnerable patients.
The FTC’s administrative complaint said the PBMs and their GPOs abused their economic power by rigging pharmaceutical supply chain competition in their favor, forcing patients to pay more for life-saving medication.
Together, these PBMs, known as the Big Three, administer about 80% of all prescriptions in the United States, according to the FTC complaint.
An original investigation by the commission was focused on insulin costs but the FTC now seeks relief that sweeps more broadly and implicates all drugs,
WHY THIS MATTERS
PBMs are vertically integrated with the country’s largest insurers: Express Scripts is owned by Cigna; Caremark is owned by CVS Health; and Optum Rx is owned by UnitedHealth Group.
The PBMs argue in the lawsuit that the FTC is unconstitutionally trying to reform the industry.
The FTC, the PBM lawsuit said, wants to “upend present day drug rebate contracts, forcing PBMs to revamp their entire contracting framework and countless contracts with drug manufacturers, health plan sponsors and other private parties.”
The FTC’s administrative proceeding wants to restrict the PBMs’ ability to negotiate lower drug costs for their plan sponsor clients, the lawsuit said. The FTC’s administrative complaint gives the commission “roving license” to define practices as unfair based on its own subjective policy preferences, the lawsuit said. It is an attempt to reshape an entire industry via law enforcement and would never pass muster in a district court, the lawsuit said.
The PBMs want a declaratory judgment that the FTC proceeding is unlawful.
THE LARGER TREND
The three largest PBMs are UnitedHealth Group’s OptumRx, Cigna’s Express Scripts and CVS Health’s CVS Caremark.
In July, the FTC released a report on pharmacy benefit managers, “Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies.” Express Scripts sued the Federal Trade Commission over the report.
The FTC report on pharmacy benefit managers was the result of a two-year investigation into PBM practices and concluded that PBMs are “powerful middlemen” that are inflating drug costs and squeezing Main Street pharmacies.
Email the writer: SMorse@himss.org