Dive Brief:
Express Scripts, Caremark and Optum Rx are turning to an appeals court to try to reverse a legal setback in their ongoing feud with the Federal Trade Commission.
The PBMs said on Friday they will ask the 8th Circuit Court of Appeals to halt the agency’s suit against them for allegedly inflating the cost of insulin, three days after a Missouri district judge ruled the FTC’s case could move forward.
The PBMs — known as the “Big Three” for their outsized control of the U.S. prescription drug market — also asked the district judge again for an injunction halting the FTC’s suit pending their appeal. Express Scripts, Caremark and Optum Rx intend to ask the 8th Circuit for an injunction in one week unless the district court complies.
Dive Insight:
The FTC sued Cigna-owned Express Scripts, CVS-owned Caremark and UnitedHealth-owned Optum Rx in September, arguing that the drug middlemen prefer more expensive insulin products because they result in higher rebates from pharmaceutical companies. Pharmaceutical companies increase the list price of insulin as a result, according to the FTC.
Anticompetitive rebating is just one line of attack from antitrust regulators against the Big Three. Together Express Scripts, Caremark and Optum Rx hold oligarchic control over how consumers access drugs in the U.S., with negative downstream effects on payers, employers, patients and independent pharmacies, according to the FTC.
Meanwhile, the PBMs say they save customers money, and have cast themselves as unfair victims of antitrust regulators gunning for someone to blame for unaffordable U.S. drug prices.
The companies also argue the FTC’s lawsuit, which was filed in in-house administrative court instead of a federal one, deprives them of the right to due process and unfairly weighs the case in the FTC’s favor.
Express Scripts, Caremark and Optum Rx, along with their purchasing affiliates, sued the FTC in November, saying its suit is unconstitutional.
On Tuesday, Missouri’s eastern district court disagreed, denying the PBMs’ request for a preliminary injunction. Halting the case would be “against the public’s interest,” Judge Matthew Schelp ruled.
Express Scripts, Caremark and Optum Rx are now hoping the St. Louis-based 8th Circuit may give them some relief, notifying Schelp on Friday they plan to appeal his decision.
The PBMs also asked Schelp to reconsider an injunction, arguing a stoppage is warranted to maintain the status quo while they argue their case before the 8th Circuit.
“Although the Court did not ultimately adopt Plaintiffs’ arguments, Plaintiffs respectfully submit that there is a fair chance the 8th Circuit could take a different view on at least one of Plaintiffs’ claims,” the PBMs wrote in a memo supporting their request for an injunction.
The 8th Circuit could take a different view, given the conservative-leaning court — comprised overwhelmingly of judges appointed by Republican presidents — has a history of ruling against perceived government overreach. That includes blocking former President Joe Biden’s plan to make it easier for Americans to pay off student loans earlier this month.
