Healthcare Giants Take on Federal Trade Commission
A David vs. Goliath Battle Unfolds
CVS Health, UnitedHealth Group, and Cigna have taken a bold step by suing the Federal Trade Commission (FTC) over its case against drug supply chain middlemen, citing unconstitutional practices.
The Background
The FTC filed a lawsuit in September against the three largest pharmacy benefit managers (PBMs) in the US, accusing them of using a “perverse” rebate system to boost profits while inflating insulin costs for Americans. The PBMs, which include CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx, are responsible for negotiating rebates with drug manufacturers, reimbursing pharmacies, and creating lists of medications covered by insurance.
The Complaint
The companies argue that the FTC’s in-house administrative process violates their due process rights under the Fifth Amendment. They claim that the agency’s claims involve private rights that must be litigated in federal court, rather than in the agency’s in-house administrative court. The companies label the process “fundamentally unfair,” citing the lack of democratic accountability.
A Constitutional Showdown
The FTC spokesperson, Douglas Farrar, responded to the complaint, stating that it’s a common tactic for corporate giants to challenge the constitutionality of the agency to distract from alleged harmful business practices. However, the companies remain adamant that the FTC’s process is flawed and biased.
Bias Allegations
This lawsuit comes on the heels of demands from CVS, UnitedHealth Group, and Cigna for FTC Chair Lina Khan and two other commissioners to recuse themselves from the agency’s in-house suit. The companies argue that the commissioners have made public statements indicating bias against the PBMs.
The Stakes
The outcome of this lawsuit will have far-reaching implications for the healthcare industry. The PBMs, which collectively administer about 80% of the nation’s prescriptions, are at the center of the drug supply chain. A ruling in favor of the FTC could reshape the industry, while a victory for the PBMs could maintain the status quo.
What’s Next?
As the legal battle unfolds, one thing is certain – the stakes are high. The healthcare industry, patients, and lawmakers will be watching closely to see how this David vs. Goliath battle plays out. Will the FTC’s claims against the PBMs hold up in court, or will the companies succeed in their challenge to the agency’s constitutionality? Only time will tell.
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