UnitedHealth Group’s Optum Rx, CVS Health's Caremark and Cigna’s Express Scripts have sued the Federal Trade Commission alleging the agency’s in-house case over insulin prices is unconstitutional.
The companies, the three largest pharmacy benefit managers by market share, are suing to block the administrative proceedings, according to a complaint filed Tuesday in the U.S. District Court for the Eastern District of Missouri. The PBMs' associated group purchasing organizations Emisar Pharma Services, Zinc Health Services and Ascent Health Services, respectively, are also plaintiffs in the case.
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In September, the FTC filed a complaint in its administrative court alleging a rebate system used by PBMs has wrongly inflated insulin prices.
The PBMs allege in their complaint that the case, in the agency's in-house forum, could limit their ability to drive down prices for customers.
“The Commission’s administrative proceeding ... seeks to restrict Plaintiff PBMs’ ability to negotiate lower drug costs for their plan sponsor clients,” the Tuesday complaint says.
The PBMs allege the FTC’s claims — which they deny — involve private rights that should be heard in a federal court and allege the administrative proceeding violates their due process rights under the Fifth Amendment.
"This Court ultimately need not decide the merits of these contentions. Instead, it need only conclude that the Commission’s claims cannot proceed in administrative proceedings that violate multiple constitutional safeguards," the complaint reads.
In Tuesday statements, CVS Caremark and Express Scripts said they have lowered insulin prices for consumers.
“If the FTC succeeds in its misguided attack on PBMs, there won’t be anyone to prevent manufacturers from raising prices even higher and putting critical medication out of reach for more and more Americans, and that is unacceptable,” Express Scripts said in a statement.
UnitedHealth Group did not immediately return a request for comment.
“It has become fashionable for corporate giants to argue that a 110-year-old federal agency is unconstitutional to distract from business practices that we allege, in the case of PBMS, harm sick patients by forcing them to pay huge sums for life saving medicine. It will not work,” FTC spokesperson Douglas Farrar said in a Tuesday statement.
Express Scripts, CVS Caremark and OptumRx control 59.2% of the pharmacy benefits market, according to a September American Medical Association report. Other data indicate the three PBMs control about 80% of the market.
The FTC’s complaint in September followed an agency report released in July regarding how PBM business practices could influence costs for employers, health plans and consumers. Express Scripts sued the FTC in September, alleging the PBM report is defamatory.
