Overview
As discussed in previous articles by Frier Levitt, the Federal Trade Commission (“FTC”) filed an administrative complaint (“Complaint”) against the three largest Pharmacy Benefit Mangers (“PBMs”), Caremark, Express Scripts, and Optum Rx, and their affiliated Group Purchasing Organizations (“GPOs”) (collectively “Respondents”). [1] As noted, the FTC’s complaint alleges that the PBMs engaged in anti-competitive and unfair rebate practices that artificially inflated insulin costs. The FTC filed its complaint after completing a two-year examination of these PBMs, which resulted in the FTC issuing an Interim Report this past summer. Since the complaint was filed, there have been several developments and filings in the case, including a concerted effort by the PBMs to challenge the FTC’s case, including by strategically challenging the commissioners and moving for their disqualification from the proceedings.
Recent Updates and Developments
A. PBM Motions to Disqualify the Commissioners Based on Alleged Bias
As discussed in a previous article, Respondents’ Motions to Disqualify the Commissioners, is based on concerns over alleged bias. [2] On October 25, 2024, Express Scripts filed a Supplemental Notice alleging that since Complaint Counsel had yet to respond to the Motion to Disqualify, Complaint Counsel had in effect consented to the disqualification according to 16 C.F.R. § 3.22(d). [3] On October 30, 2024, Complaint Counsel responded to Express Scripts’ Supplemental Notice, challenging Express Scripts’ position. [4] According to Complaint Counsel, under 16 C.F.R. § 4.17, Complaint Counsel was not required to respond to a motion to disqualify and would otherwise not take a position on the matter.
B. PBM Motions Seeking Separate Evidentiary Hearings
On October 18, 2024, Express Scripts moved for a separate evidentiary hearing to prevent each individual PBM’s case from being consolidated into a single proceeding. Caremark and Optum Rx joined in this effort and filed similar motions on October 22, 2024 and October 23, 2024 respectively. [5] The PBMs’ motions were similar and argued, among other things, that since they are each a competitor, a consolidated evidentiary hearing would carry risks, including revealing confidential, proprietary information. The PBMs also argued that separate evidentiary hearings were necessary because a consolidated hearing would be unfair and inefficient. On November 4, 2024, Complaint Counsel filed opposed PBMs’ Motions seeking a separate evidentiary hearing and argued that the Commission has voted on a single proceeding for good reason, including because the PBMs are accused of similar violations and conduct. [6] Complaint Counsel also argued that it will be inefficient to present common evidence during three separate proceedings or hearings. More recently, on November 14, 2024, the PBMs’ motions seeking separate evidentiary hearings were denied. In denying the motions, Presiding Administrative Law Judge Chappell stated that separate evidentiary hearings for a single case would be inefficient and costly.
How Frier Levitt Can Help
Frier Levitt represents industry stakeholders, including pharmacies and other healthcare providers across the United States in challenging PBM audits, network access issues, unlawful reimbursement practices, and related conduct. Frier Levitt also represents these same stakeholders in litigation in federal state courts as well as in private arbitration and further in administrative proceedings at both the federal and state level. Our attorneys have experience in analyzing contract terms, reimbursement rates and network agreements as well as experience in challenging PBM violations of state law. Contact us today to speak with an attorney on how your pharmacy can navigate challenges against PBMs.
[1] the FTC’s Complaint can be found at https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin.
[2] Respondents’ Motions for Disqualification can be found at https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin
[3] Express Script’s Supplemental Notice can be found at https://www.ftc.gov/system/files/ftc_gov/pdf/612042.2024.10.25_esi_respondents_supplemental_notice.pdf
[4] Complaint Counsel’s Response to Express Scripts Supplemental Notice can be found at https://www.ftc.gov/system/files/ftc_gov/pdf/612089.2024.10.30_complaint_counsel_response_to_esi_supplemental_notice.pdf
[5] Respondents’ Motions for Separate Evidentiary Hearings can be found at https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin
[6] Complaint Counsel’s Opposition to Respondent’s Motion for Separate Evidentiary Hearing can be found at https://www.ftc.gov/system/files/ftc_gov/pdf/612112.2024.11.04_cc_opposition_to_separate_hearings.pdf
