CVS Health, UnitedHealth Group And Cigna sued the Federal Trade Commission on Tuesday, claiming the agency's lawsuit against drug supply chain middlemen over high insulin prices within the U.S. was unconstitutional.
The lawsuit, filed within the U.S. District Court for the Eastern District of Missouri, is the most recent step in a bitter legal battle between the three largest pharmacy profit managers (PBMs) within the U.S. and the FTC.
The FTC sued CVS's Caremark, Cigna's Express Scripts and UnitedHealth's Optum Rx within the agency's administrative law court in September, accusing these PBMs and other drug middlemen of using a “perverse” rebate system to spice up 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 grievance argues that the FTC's motion violates the businesses' procedural rights under the Fifth Amendment. The corporations also contend that the FTC's claims involve private rights that have to be litigated in federal court relatively than the agency's internal administrative tribunal.
The corporations 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 grievance states.
In a press release 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 cash for life-saving drugs won’t work.
PBMs are at the middle of the drug supply chain within the United States. They negotiate discounts with drug manufacturers on behalf of medical health insurance corporations, reimburse pharmacies for prescriptions, and create lists of medicines covered by insurance.
The grievance 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 businesses argued that every one three commissioners had an in depth track record of creating 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.
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