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FTC Chairwoman Lina Khan and two other commissioners are facing demands from CVS Health, UnitedHealth Group, and Cigna to recuse themselves from a lawsuit alleging that drug middlemen inflated insulin costs for Americans while boosting their profits. The companies argue that the commissioners have shown bias against pharmacy benefit managers (PBMs) in their public statements, prejudging the matter and violating due process.
The companies allege that Khan, as well as Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, have made inaccurate statements about PBMs being “price gougers” and exerting significant control over drug pricing and access. CVS, UnitedHealth, and Cigna all filed motions with the FTC, citing the commissioners’ bias and calling for their recusal from the case.
The FTC filed a complaint against the three largest PBMs – CVS Health’s Caremark, UnitedHealth Group’s Optum Rx, and Cigna’s Express Scripts – accusing them of creating a system that prioritizes high rebates from manufacturers, leading to artificially inflated insulin prices. The lawsuit also implicates each PBM’s affiliated group purchasing organization, alleging anticompetitive practices in the pharmaceutical market.
In response to the motion for recusal, CVS highlighted Khan’s past statements vilifying PBMs and Slaughter’s remarks about their allegedly harmful practices. The company also raised concerns about the commissioners attending events that fundraised for anti-PBM lobbying groups, where PBMs were demonized as “bloodsuckers” and “vampires.”
The Biden administration and lawmakers have increased scrutiny on PBMs to improve transparency in their operations, as Americans struggle to afford prescription drugs. The issue of high drug prices in the U.S. has prompted calls for reform and stricter oversight of the pharmaceutical industry.
Overall, the legal battle between the FTC and major PBMs underscores the ongoing challenges in the healthcare sector, particularly concerning the affordability and accessibility of essential medications for patients.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.