CVS, UnitedHealth Request FTC Chair Recusal Amid Ongoing Pharmacy Benefit Managers Lawsuit

In September, the Federal Trade Commission (FTC) filed a formal complaint against three major pharmacy benefit managers (PBMs)—CVS Health Inc’s CVS Caremark, Cigna Corp’s CI Express Scripts, and UnitedHealth Group Inc’s UNH Optum—for allegedly engaging in unfair and anti-competitive practices that have inflated the list price of insulin medications.

The complaint accuses the PBMs of creating a system that benefits them financially by prioritizing drug rebates, forcing patients to pay higher costs for life-saving insulin. These PBMs, referred to as the Big Three, administer around 80% of prescriptions in the U.S.

Also Read: FTC Investigation Uncovers Anti-Competitive Practices By Handful Of Pharmacy Benefit Managers, Including CVS Health, UnitedHealth.

CVS Health and UnitedHealth Group have requested that U.S. Federal Trade Commission (FTC) Chair Lina Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya recuse themselves from an ongoing FTC lawsuit.

The companies, in motions shared with Reuters following their Tuesday filing in the FTC’s internal court, argued that Khan, Slaughter, and Bedoya have shown bias against pharmacy benefit managers and have already formed judgments on their pricing practices.

CVS referenced the commissioners’ 2022 statements, which accused pharmacy benefit managers (PBMs) of excluding more affordable generics from coverage plans. The company also noted 2024 congressional testimony where PBMs were labeled “middlemen” between drug manufacturers and patients needing medication.

UnitedHealth argued that the commissioners’ involvement in anti-PBM events showed bias against the industry, Reuters reports.

CVS further highlighted claims that volume-based discounts, or rebates, contribute to higher patient costs. It also pointed to FTC Chair Lina Khan’s appearance at a 2022 National Community Pharmacist Association event, an organization of independent pharmacists critical of PBMs.

Last week, Texas Attorney General Ken Paxton filed a lawsuit against several major insulin manufacturers and pharmacy benefit managers (PBMs), alleging a conspiracy to inflate insulin prices.

The lawsuit targets pharmaceutical companies such as Eli Lilly And Co LLY and PBMs, accusing them of engaging in an unlawful scheme to raise insulin prices.

Price Action: At the last check on Wednesday, CVS stock was down 0.51% at $65.56, and UNH stock was 1.17% at $588.36.

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