PBM strikes back at FTC over drug pricing report

A pharmacy benefit manager has thrown a legal punch at the Federal Trade Commission (FTC), taking issue with the agency's recent report accusing PBMs of using anti-competitive practices to drive up prescription drug prices.

The complaint, filed by Express Scripts owner Cigna against the FTC and Commissioner Lina Khan, is seeking the retraction of the report, which the company claims is "unfair, biased, erroneous, and defamatory" against the PBM industry and is "seventy-four pages of unsupported innuendo."

The suit claims that the agency ignored the evidence provided by Express Scripts and other PBMs, demonstrates "clear ideological bias", and is advancing a "false and damaging narrative" that could drive up drug prices even further. Express Scripts also wants Khan to be recused from any actions that involve the company.

The FTC's long-awaited report published in July was a difficult read for the PBM industry, concluding that the six largest companies in the US market operate a concentrated market structure that allows them to profit at the expense of patients and independent pharmacists.

It also claimed that some of the prescription drug rebates negotiated by PBMs are predicated on limiting access to potentially lower-cost generic and biosimilar competitors in order to drive up profits.

The FTC told Reuters that it stands by its report and is committed to shedding light on "a complicated and opaque market" for the benefit of patients and policymakers.

Other organisations have also come out in support of the regulator. The American Economic Liberties Project – a non-profit advocacy group that lobbies for corporate accountability legislation and enforcement of antitrust regulations – said Express Scripts' action is "baseless" and "straight out of the monopolist playbook – a hollow, desperate bid to avoid accountability."

There's little doubt that the legal action comes amid growing scrutiny of PBMs and their role in drug pricing, with state and federal lawmakers launching their own investigations into the sector. Meanwhile, dozens of self-funded payers are already suing the big three PBMs – Express Scripts, OptumRx, and CVS Caremark – over alleged anti-competitive practices that have driven up insulin costs.

The FTC is reported to be preparing its own lawsuit against the top companies in the sector, which is expected to include allegations that some of them have hindered its long-running investigation into the sector by failing to hand over detailed business records.

Andrea Nelson, Cigna's chief legal officer, insisted that wasn't the case with Express Scripts, claiming the company cooperated with the two-year FTC probe and met "extensive demands" for data and information.

"We don't take this step lightly, but as advocates working to lower drug prices for millions of Americans and the employers, labour unions, and government agencies that provide their prescription drug benefits, we cannot let the FTC's unlawful actions and false information stand," said Nelson.

Photo by Nathz Guardia on Unsplash