By Anna Wilde Mathews
One of the country's biggest pharmacy-benefit managers, Cigna Group's Express Scripts, sued the Federal Trade Commission, demanding a retraction of a recent report critical of the companies that negotiate drug spending.
In the lawsuit, Cigna's Express Scripts pharmacy-benefit unit calls the agency's July report "seventy-four pages of unsupported innuendo" and takes aim at FTC Chair Lina Khan, arguing that she is biased against the industry.
The lawsuit, which the company filed Tuesday in federal court in St. Louis, heightens the conflict between the FTC and leading pharmacy-benefit managers, or PBMs, which play a critical role in paying for drugs.
It comes after The Wall Street Journal reported the FTC is preparing to sue the largest PBMs over their tactics for negotiating prices for drugs including insulin.
The FTC said it stands by its study. "Just three companies control nearly 80% of the market that millions of Americans must use to purchase necessary drugs at high costs," an agency spokesman said. "This is a complicated and opaque market, and the FTC is committed to using its clear authority to help the public and policymakers understand it."
The firms are supposed to bring down the cost of medicines by negotiating with drug manufacturers and pharmacies, but the FTC said in its report that they sometimes steer patients away from less expensive medicines and overcharge for cancer therapies.
Health insurers and employers hire PBMs to control spending on medicines. But some patients, pharmacists and lawmakers have attacked the firms, saying they profit from the complexity of the drug business.
The FTC issued its report after a two-year investigation of PBM business practices, though it was framed as interim findings from the probe. States have also been examining the companies.
PBMs say they pass along to health plans and employers the discounts and other savings they negotiate and as a result, hold down spending. The firms blame pharmaceutical companies for high drug prices. They called the FTC report flawed.
In the lawsuit, Express Scripts said the FTC violated the company's constitutional right to due process and exceeded its statutory authority in releasing a report that included false and unsupported conclusions based on a biased process.
The company also said it had been defamed, claiming that the FTC largely ignored extensive documents that Express Scripts produced and instead relied "overwhelmingly on information cherry-picked from public sources and anonymous comments to fit the Commission's predetermined narrative that PBMs drive up drug prices and disadvantage independent pharmacies."
Andrea Nelson, chief legal officer of the Cigna Group, said the goal of the suit was to have the report retracted. The complaint asks the court to issue an order "vacating and setting aside the report" and require the FTC to remove it from the agency's websites.
Companies targeted by the FTC regularly mount legal attacks on the agency, and Khan has been a particular focus.
The three largest pharmacy-benefit managers are part of healthcare conglomerates that include insurers and other companies. UnitedHealth Group's OptumRx and CVS Health's Caremark, in addition to Express Scripts, which is part of Cigna's Evernorth arm, manage about 80% of U.S. prescriptions.
Write to Anna Wilde Mathews at Anna.Mathews@wsj.com
(END) Dow Jones Newswires
September 17, 2024 07:13 ET (11:13 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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