CVS and UnitedHealth Demand FTC Chair Recuse Herself from Insulin Price Suit

CVS Health and UnitedHealth Group are calling for the recusal of Federal Trade Commission (FTC) Chair Lina Khan and two other commissioners from a lawsuit accusing pharmacy benefit managers (PBMs) of inflating insulin prices. According to CNBC, both companies have argued that Khan, along with Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, have shown clear bias in their public statements, making it inappropriate for them to participate in the case.

In separate motions filed Tuesday night, CVS and UnitedHealth expressed concerns over statements made by the commissioners, accusing them of prematurely labeling PBMs as “price gougers” who manipulate drug pricing and access. CVS, in a 23-page motion, argued that the commissioners’ prior remarks demonstrate that they have “prejudged” the case, violating the companies’ due process rights. Per CNBC, CVS stated, “If the opposite of ‘complete fairness’ is ‘blatant bias,’ the Three Commissioners would easily satisfy even that standard.”

UnitedHealth echoed similar sentiments in a 17-page motion, arguing that any judge expressing such views would be required to step aside due to evident bias. Both companies are seeking the disqualification of the commissioners from the FTC’s lawsuit, which targets the largest PBMs in the country, including CVS Health’s Caremark, UnitedHealth’s Optum Rx, and Cigna’s Express Scripts. Together, these PBMs are responsible for managing nearly 80% of the nation’s prescriptions, according to the FTC.

The lawsuit, filed last month, accuses the three PBMs of creating a system that prioritizes high manufacturer rebates, which in turn leads to “artificially inflated insulin list prices.” The FTC alleges that the PBMs’ actions have allowed them to favor insulins with higher list prices, even when more affordable options are available, further driving up costs for consumers. The suit also includes group purchasing organizations (GPOs) affiliated with each PBM, which handle drug purchases for healthcare providers.

Related: FTC Chair Lina Khan Signals Possible Interest in Epic Antitrust Lawsuit

This legal battle is the latest in a series of challenges faced by CVS Health. As CNBC reported, the company has seen its shares drop by over 20% this year, largely due to rising medical costs and pressure from pharmacy reimbursements. CVS has reportedly engaged advisors to conduct a strategic review of its business, which may include separating its insurance division from its retail pharmacies. It remains unclear how Caremark, CVS’s PBM, would be impacted if the company chooses to break up its operations.

While CVS and UnitedHealth argue for the recusal of key FTC commissioners, Khan has faced similar challenges in the past. According to CNBC, major companies such as Amazon and Meta have also pushed for Khan’s disqualification in previous investigations, citing concerns about her impartiality. However, Khan has consistently resisted these efforts, maintaining that she has never prejudged any case or set of facts.

The FTC’s lawsuit against the PBMs comes amid broader scrutiny of their role in the U.S. drug supply chain, particularly regarding insulin pricing. Since 2022, the FTC has been investigating how PBMs negotiate rebates, create preferred drug lists, and reimburse pharmacies. The agency’s focus on PBMs is part of a larger effort to address rising healthcare costs and ensure fair pricing practices within the industry.

Source: CNBC