Express Scripts sues FTC over ‘defamatory’ drug pricing report

Express scripts (CI), a subsidiary of the Cigna Group and one of the largest Pharmacy Benefit Managers (PBMs) in the United States, filed a lawsuit against the U.S. Federal Trade Commission (FTC) on Tuesday morning over a July report from the agency, which alleged that the PBM industry was raising drug prices.

In the suitIn a lawsuit filed in federal court in the Eastern District of Missouri, Express Scripts alleged that the commission's report was “unfair, biased, erroneous and defamatory” and demanded its retraction.

“The FTC has taken unconstitutional action by issuing a report that ignores the evidence presented by our company and other PBMs, displays a clear ideological bias, and spreads a false and harmful narrative – a narrative that could harm the health care system by removing essential checks and balances, resulting in higher drug prices for American consumers,” said Andrea Nelson, chief legal officer of Cigna Group, in a opinion.

The FTC told Quartz that it stands by its study.

“Just three companies control nearly 80 percent of the market where millions of Americans must purchase their necessary medicines at high prices,” FTC spokesman Douglas Farrar said in an emailed statement to Quartz. “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.”

PBM are supposed to be third-party companies that act as intermediaries between drug manufacturers and insurance providers. However, their excessive power to set drug prices for millions of Americans has been criticized not only by the FTC but also by Legislators.

The FTC said in his report that “increasing vertical integration and concentration has enabled the six largest PBMs to handle nearly 95 percent of all prescriptions filled in the United States.”

The result is a system in which “vertically integrated PBMs appear to have the ability and incentive to favor their own affiliates, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.”

According to FTC Chair Lina M. Khan, the findings showed that middlemen were “overcharging patients for cancer drugs,” generating more than $1 billion in additional revenue for them.

Express Scripts alleges that the FTC's report omitted documents and data provided by the company and other PBMs, resulting in the report containing false and misleading claims.

“The Commission's report was based on bias and politics, not evidence or sound economics, and falsely concluded that PBMs drive up drug costs and harm independent pharmacies,” the lawsuit states. “Express Scripts' business and reputation were harmed by the Commission's unlawful, unconstitutional, arbitrary and capricious conduct and defamatory statements.”

– Ben Kesslen contributed to this article.