Express Scripts sues FTC over 'flawed and biased' PBM report

Pharmacy benefit manager Express Scripts is fighting back against the ongoing Federal Trade Commission investigation into its industry's business practices.

The Cigna division filed a lawsuit Tuesday in the U.S. District Court for the Eastern District of Missouri that demands the FTC retract an interim report it issued in July, which concluded the biggest PBMs profit from high drug prices, overcharge patients, harm independent pharmacies and restrict access to lower-cost medicines.

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The FTC report, which stemmed from a probe that began more than two years ago, is false, defamatory and unconstitutional, Express Scripts asserts in its complaint.

“It is seventy-four pages of unsupported innuendo leveled against Express Scripts and other PBMs under a false and defamatory headline and accompanied by a false and defamatory press release,” Express Scripts wrote in the lawsuit.

The FTC rejected Express Scripts' claims.

“This is a complicated and opaque market, and the FTC is committed to using its clear authority to help the public and policymakers understand it,” the FTC said in a statement. Four commissioners voted in favor of releasing the report while one dissented.

The FTC may be gearing up to sue Express Scripts, CVS Caremark and OptumRx based on its investigation, Bloomberg News reported in July, citing a source familiar with the matter.

Express Scripts, CVS Health subsidiary CVS Caremark, UnitedHealth Group unit OptumRx collectively hold a 59.2% market share, according to data the American Medical Association published this month. Express Scripts is the third-largest PBM by market share at 17.1%, the AMA reported.

The FTC report has a “clear ideological bias” and makes misleading claims about PBMs that could lead to policies that would inflate drug costs, Cigna Chief Legal Officer Andrea Nelson said in a news release Tuesday.

Express Scripts alleges the FTC ignored more than 3 million pages of documents the company provided and based many of its findings on public comments.

The PBM passes through 95% of rebates and fees to clients, and saved them $38 billion last year, Express Scripts asserts in the complaint. “PBMs have low and declining operating margins and any PBM that sought to inflate the cost of covered drugs would quickly lose its clients,” the lawsuit says.

Express Scripts also notes that the FTC report has fueled other problems, including legal actions and congressional scrutiny. Congress has considered a number of PBM bills over the past two years and several committees have held hearings critical of the industry. Last month, House Oversight and Accountability Committee Chair James Comer (R-Ky.) threatened the chief executives of CVS Caremark, OptumRx and Express Scripts with criminal charges for allegedly lying to his panel in July.

Express Scripts, a unit of Cigna’s Evernorth Health Services subsidiary, asks the court to order the FTC to withdraw its report and to exclude Chair Lina Khan from deliberations involving the company given her alleged bias against PBMs, the lawsuit says.

CVS Health similarly slammed the FTC. “Contrary to the insinuations in that interim report, independent outside economists have reviewed the terabytes of data we provided the FTC and determined that CVS Caremark substantially reduces drug costs for American businesses, unions and patients,” a spokesperson wrote in an email. UnitedHealth Group declined to comment.

The Pharmaceutical Care Management Association, which represents PBMs, echoed its members' remarks.

“Anecdotes and comments from anonymous sources and self-interested parties, supported only by cherry-picked case studies that are implied to be representative of the entire market, is damaging to our companies’ ability to rein in costs for the employers and patients we serve, driving costs up everywhere in the healthcare system and helping only Big Pharma,” PCMA President and CEO JC Scott said in a news release Tuesday.