Express Scripts Sues FTC to Withdraw its PBM Report

Express Scripts is suing the Federal Trade Commission (FTC) and demanding that it withdraw what it is calling false and misleading claims. The company said the FTC in its July 2024 report on the PBM industry makes unsubstantiated, false and biased claims about the industry.

Andrea Nelson

“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 – a narrative that could harm the health care system by removing essential checks and balances which would result in higher drug prices for American consumers,” Andrea Nelson, chief legal officer for The Cigna Group, said in a news release. Express Scripts is part of Evernorth, which is a subsidiary of Cigna.

Related: Interim FTC Report Finds PBMs Squeeze Independent Pharmacies, Overcharge for Drugs

In its interim report, the FTC said that vertical integration has allowed PBMs to profit at the expense of patients and independent pharmacists. This consolidation, the FTC said, has given the large PBMs significant power and influence, created incentives to prefer their own organizations, led to conflicts of interests, steered patients to their own pharmacies and developed unfair contracts with independent pharmacies.

The agency cited data that four of the largest companies now account for 22% of all national healthcare expenditures, up from 14% eight years. Collectively, these four large healthcare companies have seen net revenue rise by 159% over the period from 2016 to 2023, driven by mergers and acquisitions.

This consolidation, the FTC said, has given the large PBMs significant power and influence, created incentives to prefer their own organizations, led to conflicts of interests, steered patients to their own pharmacies and developed unfair contracts with independent pharmacies.

The FTC launched its inquiry into the impact of PBMs in June 2022, asking six PBMs — CVS Caremark; Express Scripts; OptumRx; Humana; Prime Therapeutics; and MedImpact Healthcare Systems — for information and records about their business practices. In 2023, the FTC asked three group purchasing organizations — Zinc Health Services, Ascent Health Services, and Emisar Pharma Service — for similar information.

"The FTC stands by our study," Douglas Farrar, FTC spokesperson told Formulary Watch. "Just three companies control nearly 80% of the market that millions of Americans must use to purchase necessary drugs at high costs. 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."

The Express Scripts Suit

Express Scripts said in its lawsuit that the FTC report is not an analysis of data provided by the PBMs.

“Instead, it is seventy-four pages of unsupported innuendo leveled against Express Scripts and other PBMs under a false and defamatory headline and accompanied by a false and defamatory press release,” the suit said. “The Commission disregarded the millions of documents and terabytes of data produced and relied instead on unverified comments from the very companies that PBMs negotiate against in order to help lower drug costs.”

Lina M. Khan

Additionally, Express Scripts alleges that the FTC followed “prejudice and politics, not evidence or sound economics.” The company said there is no support for the alleged power of PBMs has increased over time."

Express Scripts said in its suit that FTC Chair Lina M. Khan has anti-PBM bias and that even before she was appointed to the agency, Khan has said PBMs are responsible for increasing drug prices.