Express Scripts sues FTC over report about pharmacy benefit managers
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Cigna's Express Scripts filed a lawsuit Tuesday challenging a federal report that places the blame for rising drug prices on pharmacy benefit managers, describing it as "seventy-four pages of unsupported innuendo" and calling for a retraction.
Why it matters: Experts say the lawsuit is legally dubious but represents significant pushback from pharmacy middlemen "to counterbalance the narrative" from regulators.
Catch up quick: In July, the FTC released a critical report about the PBM industry, alleging it is dominated by three major players, including Express Scripts, that use their market power to overcharge patients.
- "The FTC has taken unconstitutional actions in publishing a report that ignores the evidence provided by our company and other PBMs, demonstrates clear ideological bias and advances a false and damaging narrative," said Andrea Nelson, chief legal officer for The Cigna Group in a statement.
- In a response, the FTC said it stood by the report. "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," FTC spokesman Douglas Farrar said in an email to Axios.
What they're saying: Cigna's lawsuit "faces [a] high hurdle of success based on our checks, but at least starts to counter-balance the FTC's narrative," TD Cowen posted in a note on Tuesday.
- "The ultimate goal could be to lay groundwork ahead of possible future actions (FTC and/or legislative)," they wrote.
- PBMs are "under a lot of pressure right now, and what you're seeing is the response to that," Mark Pifko, Baron & Budd partner, told Axios. But, he called the idea of suing the government for defamation "nonsense."
- Despite agreeing with critiques of the initial FTC report, Alden Abbott, a Mercatus Center research fellow and former FTC general counsel, said in a statement that it was "legally questionable" to justify a lawsuit yet.
- "As of now, there is no showing that the interim report has been relied upon as the basis for FTC litigation against PBMs," he said in a statement. "We must await further developments to see how the interim report (and a possible final report) will be used or not used."
