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WASHINGTON — CVS Health, UnitedHealth Group and Cigna announced that they are suing the Federal Trade Commission this week, saying that the agency’s case against drug supply chain middlemen over high insulin prices in the U.S. is unconstitutional.
The complaint, which was filed in the U.S. District Court for the Eastern District of Missouri, is the latest move in a bitter legal fight between the three largest PBMs in the U.S. and the FTC.
The FTC in September sued CVS’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx in the agency’s administrative court, accusing those PBMs and other drug middlemen of using a “perverse” rebate system to boost their profits while inflating insulin costs for Americans.
The FTC’s in-house administrative process initiates a proceeding before an administrative judge who would hear the case. FTC commissioners then vote on that opinion.
The Tuesday complaint argues that the FTC’s process violates the companies’ due process rights under the Fifth Amendment. The companies also allege that the FTC’s claims involve private rights that must be litigated in federal court rather than in the agency’s in-house administrative court.
The companies called that process “fundamentally unfair,” noting that commissioners and an administrative law judge are “unconstitutionally insulated from removal by the president and thus are insulated from democratic accountability.”
FTC spokesman Douglas Farrar said in a statement: “It has become fashionable for corporate giants to argue that a 110-year-old federal agency is unconstitutional to distract from business practices that we allege, in the case of PBMs, harm sick patients by forcing them to pay huge sums for life saving medicine. It will not work."
