FTC Chief Faces Pushback in Battle Against Pharmacy Middlemen
In a dramatic turn of events, the biggest names in the world of pharmacy benefit managers (PBM) are fighting against a federal lawsuit. They’re asking a judge to bench the head referee – Federal Trade Commission (FTC) Chair Lina Khan.
UnitedHealth Group, CVS Health, and Cigna have all filed motions to disqualify Khan and two other Democratic FTC commissioners from overseeing the agency’s lawsuit against major PBMs. These companies argue that Khan and her colleagues have already decided on PBMs’ guilt.
The FTC sued these PBMs last month, claiming they drove up insulin prices unfairly. But the PBMs say Khan and the others can’t be impartial judges in this fight.
“They’ve been trash-talking us for years,” one PBM exec told me. “How can we expect a fair shake?”
The legal filings paint a picture of FTC leaders who’ve been gunning for PBMs long before this lawsuit. CVS points to Khan speaking at a pharmacy convention where people wore anti-PBM gear. UnitedHealth says Khan has made “disparaging remarks” showing “blatant bias.”
This move to sideline Khan isn’t new. Big tech companies like Amazon and Meta have tried the same tactic when facing FTC heat. So far, Khan hasn’t budged.
But what exactly are PBMs, and why all the fuss?
Think of PBMs as the behind-the-scenes dealmakers in the drug world. They negotiate prices between drug makers, insurers, and pharmacies. PBMs say they help lower drug costs, but critics argue they pocket too much money and actually drive prices up.
The Biden administration has PBMs in its crosshairs. They want to shine a light on these shadowy middlemen. An FTC report in July slammed PBMs for “inflating drug costs and squeezing Main Street pharmacies.”
That report didn’t sit well with Cigna’s Express Scripts, so they sued the FTC, demanding they take it back. The company claims the report is “filled with false and misleading claims” about PBMs.
Days after that lawsuit, the FTC fired back with its legal action against the major PBMs.
It’s a high-stakes game of legal ping-pong, with billions of dollars and the future of drug pricing hanging in the balance.
But let’s break down why this matters to you and me:
- Insulin prices: The FTC says PBM practices have made this life-saving drug too expensive for many.
- Your local pharmacy: Small pharmacies say PBMs are putting them out of business.
- Overall drug costs: The debate over PBMs could shape how much we pay for medicine.
Khan and the FTC argue that shaking up the PBM world could lead to lower drug prices. The PBMs say they’re being unfairly targeted and that removing them would worsen things.
So, what happens next?
A judge must decide whether Khan and the other commissioners can stay on the case. If they are removed, it could complicate the FTC’s plans.
Meanwhile, Congress is also eyeing PBMs. Several bills aim to change how these companies operate.
The PBM world is complex, filled with jargon that can make your head spin. But at its core, this fight is about a simple question: Are these middlemen helping or hurting American patients?
As this legal battle unfolds, we’ll all be watching to see how the question is answered. Will Khan and the FTC get their day in court? Or will the PBMs succeed in benching their most prominent critics?
One thing’s for sure – this healthcare showdown is far from over. Stay tuned as we follow the twists and turns of this high-stakes legal drama that could reshape how America pays for its medicine.