The three major PBMs being sued by the FTC have filed motions to disqualify the Democratic commissioners who would rule on the case, accusing them of bias.
Alvaro BedoyaIn its motion, CVS alleged the commissioners have made “repeated incorrect prejudgments about Caremark and Zinc and their conduct.” Zinc is CVS’ subsidiary that handles aspects of its rebate business. UnitedHealth Group’s PBM Optum Rx and Cigna’s Express Scripts made similar filings claiming bias and calling for the commissioners’ recusal.
The FTC last month sued the three major PBMs, accusing CVS Caremark, Optum Rx and Express Scripts of using large rebates for insulin that inflate costs for patients and distort the market.
The company is asking for the three Democratic commissioners — Alvaro Bedoya, Rebecca Slaughter and FTC Chair Lina Khan — to be removed from the case.
The FTC declined to comment on the motions.
When the FTC brings a case, the commission’s legal office typically pre-reviews commissioners for conflicts of interest. The two Republican commissioners were already recused from voting to bring the case forward. Company motions asking for disqualification are common — but aren’t often granted.
Rebecca SlaughterInvestment analysts with TD Cowen said they thought it was unlikely the PBMs would succeed in this instance. Instead, they said the companies were “more likely to use these motions to lay out concerns of the FTC’s bias against the industry ahead of FTC’s lawsuit against the PBMs.”
The FTC’s lawsuit is being judged in the agency’s administrative court, a process separate from the traditional court system, and findings are voted on by the commissioners. If the PBMs were successful in disqualifying the commissioners, it would essentially end the case.
Cigna has filed a separate lawsuit against the FTC, arguing for the withdrawal of an interim report making a series of related accusations about PBM’s business practices.