CVS, UnitedHealth and Cigna Sue to Block FTC Case Over Insulin Prices

The CVS Pharmacy logo is seen in Washington DC, USA on July 9, 2024.

Jakub Porzycki | Photo only | Getty Images

CVS Health, United Health Group And Cigna sued the Federal Trade Commission on Tuesday, claiming the agency's lawsuit against drug supply chain middlemen over high insulin prices in the U.S. was unconstitutional.

The lawsuit, filed in the U.S. District Court for the Eastern District of Missouri, is the latest step in a bitter legal battle between the three largest pharmacy benefit managers (PBMs) in the U.S. and the FTC.

The FTC sued CVS's Caremark, Cigna's Express Scripts and UnitedHealth's Optum Rx in the agency's administrative law court in September, accusing these PBMs and other drug middlemen of using a “perverse” rebate system to boost their profits while driving down insulin costs for the to drive Americans up.

The FTC's internal administrative process initiates proceedings before an administrative law judge, who hears the case. The FTC commissioners then vote on this opinion.

Tuesday's complaint argues that the FTC's action violates the companies' procedural rights under the Fifth Amendment. The companies also contend that the FTC's claims involve private rights that must be litigated in federal court rather than the agency's internal administrative tribunal.

The companies called that process “fundamentally unfair,” noting that commissioners and an administrative law judge were “unconstitutionally barred from removal by the president and thus from democratic accountability.”

“This sweeping attempt to transform an entire industry through law enforcement would never stand up in a U.S. District Court,” the complaint states.

In a statement Tuesday, FTC spokesman Douglas Farrar said: “It has become fashionable for corporate giants to argue that a 110-year-old federal agency is unconstitutional in order to distract from business practices that we believe, in the case of PBMS, are harming sick patients.” “Forcing them to pay huge sums of money for life-saving drugs won’t work.

PBMs are at the center of the drug supply chain in the United States. They negotiate discounts with drug manufacturers on behalf of health insurance companies, reimburse pharmacies for prescriptions, and create lists of medications covered by insurance.

The complaint comes a month after CVS, UnitedHealth Group and Cigna asked FTC Chair Lina Khan and two other commissioners to recuse themselves from the agency's internal lawsuit. In separate filings, the companies argued that all three commissioners had an extensive track record of making public statements that allegedly suggested serious bias against the PBMs.

According to the FTC, Caremark, Express Scripts and Optum Rx are all owned by or affiliated with health insurers and together manage about 80% of the nation's prescriptions.