FTC Chairwoman Lina Khan recently testified during a hearing concerning the Federal Trade Commission’s budget for 2025. However, CVS Health and UnitedHealth Group are now calling for Khan and two other commissioners to step down from a case involving drug middlemen accused of manipulating insulin prices to boost their profits.
In motions filed with the FTC, CVS and UnitedHealth argued that Khan, along with Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, have shown bias against pharmacy benefit managers (PBMs). The companies believe that the commissioners’ previous statements labeling PBMs as “price gougers” demonstrate that they have already formed opinions on the matter before the case even began.
Both CVS and UnitedHealth have accused the commissioners of violating due process by participating in the case, as they believe the commissioners have not shown complete fairness and have already made up their minds about the issue. The FTC has yet to respond to these motions.
This case is part of a larger investigation by the FTC into PBMs and their role in setting insulin prices. The agency alleges that the three largest PBMs, including CVS Health’s Caremark and UnitedHealth Group’s Optum Rx, have created a system that prioritizes high rebates from manufacturers, leading to inflated insulin prices. The FTC also claims that the PBMs favor high-priced insulins even when lower-priced alternatives are available.
In addition to the lawsuit against the PBMs, the FTC has also included the PBMs’ affiliated group purchasing organizations in the case. These organizations facilitate drug purchases for hospitals and other healthcare providers.
CVS, in particular, is facing multiple challenges, including declining stock prices and pressure in its insurance and pharmacy segments. The company is considering a strategic review that may involve separating its insurer from its retail pharmacies, though the fate of Caremark in this scenario is uncertain.
CVS alleges that Khan has a history of criticizing PBMs, citing previous statements where she has described PBMs as having significant control over medication prescriptions and pricing. Similarly, Slaughter and Bedoya have made comments condemning the practices of PBMs. CVS argues that these statements are inaccurate and show bias against Caremark and other PBMs.
The Biden administration and lawmakers are also increasing pressure on PBMs to be more transparent in their business practices. This comes as many Americans struggle to afford prescription drugs, paying significantly more than patients in other developed countries.
Overall, the case against CVS, UnitedHealth, and other PBMs sheds light on the complex and often opaque world of drug pricing in the United States. As the investigation unfolds, the role of PBMs in determining drug costs and access will continue to be scrutinized by regulators and the public alike.
