CVS Health And UnitedHealth Group are calling for Federal Trade Commission Chairwoman Lina Khan and two other commissioners to withdraw from one Men's suit They accuse the businesses and other drug intermediaries of accelerating their profits while driving up the fee of insulin for Americans.
In separate filings with the FTC on Tuesday evening, CVS and UnitedHealth argued that each one three commissioners had an in depth track record of constructing public statements that suggested “serious bias” against the businesses' so-called pharmacy profit managers let.
The firms accused Khan, in addition to commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, of falsely claiming that PBMs were “price gougers” that had significant control over pricing and access to medications like insulin. CVS said those statements showed the commissioners were “biased in this matter” and that their involvement within the case constituted “a violation of due process.”
“If the opposite of 'complete fairness' were 'manifest bias,' the three commissioners themselves would easily meet that standard,” CVS wrote in a 23-page filing.
Meanwhile, UnitedHealth's 17-page motion said: “Any judge who made these comments about a litigant at the outset of litigation would be required to recuse themselves immediately for apparent bias.”
The FTC declined CNBC's request for comment on the filing on Wednesday.
Other corporate giants, including Amazon And Metahave unsuccessfully pushed for Khan to be excluded from previous cases or investigations, citing concerns about her objectivity. Khan resisted these requests, saying she never anticipated any case or issue.
The FTC filed suit last month against the three largest PBMs, CVS Health's Caremark, UnitedHealth Group's Optum Rx and Cigna's Express Scripts. All are owned by or affiliated with health insurers and collectively manage about 80% of the nation's prescriptions, in line with the FTC.
The FTC filed its criticism under its so-called administrative procedure, which initiates proceedings before an administrative law judge who hears the case.
PBMs are at the center of the drug supply chain within the United States. They negotiate drug discounts with manufacturers on behalf of insurers, create lists of preferred drugs covered by medical health insurance firms, and reimburse pharmacies for prescriptions. The FTC has been investigating PBMs and their role in insulin prices since 2022.
The agency's lawsuit argues that the three PBMs created a “perverse” system that prioritizes deep discounts from manufacturers, leading to “artificially inflated insulin list prices.” The lawsuit also alleges that PBMs favor insulins with high list prices whilst insulins with lower list prices turn into available.
The lawsuit also affects the group purchasing organization (GPO) related to the PBM, which brokers drug purchases for hospitals and other healthcare providers. Zinc Health Services serves as GPO for Caremark, while Emisar Pharma serves as GPO for OptumRx. Ascent Health Services is the GPO for Cigna.
The lawsuit is just one in every of several headwinds facing CVS. The company's shares have fallen greater than 20% this yr because it grapples with rising medical costs in its insurance segment and reimbursement pressures in pharmacy.
CVS has hired consultants to conduct a strategic review of its business that would potentially include separating the corporate's insurer from its retail pharmacies. It's unclear where Caremark would find yourself within the event of a split.
In Tuesday's filing, CVS alleged that Khan has disparaged PBMs throughout her profession. For example, the corporate cited a Statement 2022 In it, Khan said that PBMs “virtually determine which medications are prescribed, which pharmacies patients can use, and how much patients pay at the pharmacy counter.”
CVS similarly referenced Slaughter's previous comments about PBMs' allegedly “disturbing,” “unacceptable” and “lazy” rebate practices and the way they are saying they’re resulting in “distortions of competition in pharmaceutical markets.” Meanwhile, the corporate cited Bedoya's claims that “a significant portion of the blame” for insulin price increases lies on rebates demanded by PBMs.
CVS called the three commissioners' previous statements “false allegations” about Caremark and other PBMs.
The healthcare giant also alleged that the three commissioners attended closed events to boost funds for anti-PBM lobbying groups in the course of the FTC investigation. The organizers of those events denigrated PBMs as “bloodsuckers” and “vampires,” CVS argued within the motion.
The Biden administration and lawmakers on either side have increased pressure on PBMs, looking for to extend transparency of their business practices as many patients struggle to afford prescribed drugs. On average, Americans pay two to 3 times more for prescribed drugs than patients in other industrialized nations, in line with a study Fact sheet from the White House.
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