UnitedHealth, CVS Push To Remove FTC Chair Lina Khan From PBM Case

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Dive Brief:

• UnitedHealth Group and CVS Health want Federal Trade Commission Chair Lina Khan and two other commissioners to recuse themselves from the agency’s lawsuit against the nation’s largest pharmacy benefit managers. 
• In separate documents filed Tuesday, UnitedHealth-owned Optum Rx and CVS Caremark argued Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya have “extensive” records of bias against PBMs, which should disqualify them from participating in the case.
• In September, the FTC sued the three largest PBMs in the country and their owned or affiliated group purchasing organizations for allegedly engaging in anticompetitive business practices and driving up the price of insulin.

Dive Insight: 

The complaints filed Tuesday are the latest volley in the PBMs’ dispute with the FTC, with Optum Rx and CVS Caremark arguing the three commissioners can’t be objective in this long-awaited case. 

“The Three Commissioners have a lengthy track record of making public statements that indicate serious bias against Caremark, Zinc [Health Services], and other PBMs,” attorneys for CVS wrote in the motion. “These statements demonstrate that the Three Commissioners have prejudged the Respondent PBMs’ liability in this matter.”

An FTC spokesperson said the agency had no comment on the motions.

The original lawsuit by the FTC, filed at the end of September and immediately rebuked by PBMs, followed years of growing pressure from regulators and lawmakers on PBMs, middlemen in the drug supply chain that create and administer lists of drugs covered by health plans.

The agency claimed CVS Caremark, Cigna-owned Express Scripts and Optum Rx created a “perverse” drug rebate system that prioritizes high rebates from drug manufacturers, inflating the price of insulin drugs. Rebates are payments from manufacturers to PBMs in exchanged for placement on insurers’ drug tier formularies. The middlemen argue savings from rebates are largely passed onto their clients. 

The agency said Humalog, a brand-name insulin medication, was priced at $21 in 1999. But the cost of the drug soared to more than $274 in 2017 due to the middlemen’s rebating practices. 

Ahead of the suit, Express Scripts sued the FTC last month over an agency report that showed how the middlemen’s pharmacy practices could contribute to rising drug costs. 

Other state and local governments have sued the large PBMs over insulin prices too. Last week, Texas Attorney General Ken Paxton sued Express Scripts, CVS Caremark and Optum Rx as well as three pharmaceutical companies, alleging they colluded to raise the price of the diabetes drugs.