Express Scripts has filed suit against the Federal Trade Commission (FTC), demanding that the agency retract a damning report on the pharmacy benefit management industry.
In the lawsuit, which was filed in Missouri federal court, the PBM argues that the report was filled with "false and misleading claims" about the industry. Express Scripts said that it cooperated in full with the FTC as it conducted its research over the course of two years.
"The FTC’s report disregarded the millions of documents and terabytes of data produced by Express Scripts and other PBMs," Express Scripts said in a press release. "As a result, the report is riddled with false statements, misleading insinuations and violates the Commission’s duty to follow due process and serve the public interest."
The report, released in early July, concluded that major pharmacy benefit managers have a size and scale that puts both consumers and independent pharmacies at a disadvantage.
While the FTC stopped short of arguing in favor of breaking up these companies, it did argue that some PBM business practices “warrant further scrutiny and potential regulation.” The three largest PBMs—CVS' Caremark, UnitedHealth Group's Optum and Express Scripts—control the majority of the market.
Each of these companies is also vertically integrated with a major health plan: Caremark with Aetna, Optum Rx with UnitedHealthcare and Express Scripts with Cigna, a trend that has garnered significant criticism.
A spokesperson for the FTC told the Hill that it "stands 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 spokesperson Douglas Farrar told the outlet.
Andrea Nelson, Chief Legal Officer for The Cigna Group, told Fierce Healthcare in an interview that the report has already caused reputational damage to Express Scripts and that the company is concerned about it serving as a basis for policy down the line.
The complaint (PDF) says that Express Scripts has already been subject to multiple lawsuits that are based on the report, and its release has led to demands for information from multiple states and federal legislators. For example, Rep. James Comer, chair of the House Committee on Oversight and Accountability, sent letters to Express Scripts as well as Caremark and Optum Rx in August, alleging that they committed perjury at a committee hearing on the industry, an assertion based in part on the FTC's report.
Comer threatened the leaders of these PBMs with fines and potentially jail time if they did not make corrections to the record.
"These harms have only just begun and will only be compounded over time if the Commission’s unlawful Report is not vacated or set aside by this Court," Express Scripts said in the lawsuit.
Nelson said that the report's release has been confusing for clients, too.
"There’s been a lot of confusion with our clients who don’t understand where this information is coming from and what it means for how they manage their pharmacy benefits going forward," she said. "From our perspective it’s just not bad for Express Scripts, it’s bad for the public."
She said that Express Scripts provided the FTC will more than 3.3 million pages of documents and 11 billion observable data points, but "all of it was ignored."
Express Scripts is not seeking financial damages in the suit, Nelson added.
"Our goal is to really stand up not just for our company but for American consumers," she said.
In a statement, JC Scott, CEO of the Pharmaceutical Care Management Association, the major lobbying group for PBMs, said it "reiterates its position that, to date, the Federal Trade Commission (FTC) has fallen far short of providing a definitive, fact-based assessment of pharmacy benefit managers (PBMs) or the prescription drug market."
“Anecdotes and comments from anonymous sources and self-interested parties, supported only by cherry-picked case studies that are implied to be representative of the entire market, is damaging to our companies’ ability to rein in costs for the employers and patients we serve, driving costs up everywhere in the healthcare system and helping only Big Pharma," Scott said.
Alden Abbott, a Mercatus Center research fellow and former FTC General Counsel, said that PBMs are right to be concerned about the analysis. He said in a statement that the FTC report's "assertions regarding the competitive impact of PBMs were economically unsupported."
He noted that there were dissenters to the report on the Commission. However, he cautioned that there may not be a basis for a lawsuit as of yet, as the FTC has not taken action based on the report.
"Cigna and other PBMs have good reason to be very concerned about the report. It is legally questionable, however, that this problematic report in and of itself justifies a lawsuit against the FTC," Abbott said. "As of now, there is no showing that the interim report has been relied upon as the basis for FTC litigation against PBMs."
"We must await further developments to see how the interim report (and a possible final report) will be used or not used," Abbott said.
Editor's note: This story has been updated with additional comments from Cigna Group Chief Legal Officer Andrea Nelson.