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The Cigna Group's pharmacy benefit manager, Express Scripts, is suing the Federal Trade Commission and Chair Lina Khan over what it describes as an "unfair, biased, erroneous, and defamatory" report on pharmacy benefit managers released by the agency earlier this year.
Express Scripts called the FTC's July report "seventy-four pages of unsupported innuendo" and claims the agency relied on "cherry-picked" information to push a predetermined narrative that PBMs inflate drug prices and disadvantage independent pharmacies.
In 2022, the FTC launched an inquiry into the PBM industry, requesting information and records from the six largest PBMs regarding their business practices. The Commission's corresponding report, published in July 2024, stated that PBMs favor their own pharmacies and exercise significant market control, affecting both medication access and affordability. The report also claimed PBMs sometimes steer patients away from cheaper drugs and overcharge for cancer treatments.
Express Scripts, in its lawsuit filed Sept. 17 in a St. Louis federal court, argues that the Commission's report, driven by bias and politics rather than evidence, falsely concluded that PBMs inflate drug costs and harm independent pharmacies. The company claims its business has been damaged by defamatory statements and unconstitutional actions and seeks a court ruling to invalidate the report, recuse Chair Khan, and recover legal costs. Andrea Nelson, Cigna Group's chief legal officer, stated that the goal of the suit is to have the report retracted and removed from the FTC's website.
"Express Scripts has been harmed, and continues to be harmed, by the Commission’s conduct," the lawsuit states. "It spent millions of dollars and thousands of personnel hours responding to a Commission 'study' that turned out to be a facade — mere cover for issuing the biased PBM report that the Commission and its chair planned to issue all along."
According to the FTC's report, the three largest PBMs — CVS Caremark, Express Scripts, and UnitedHealth's Optum Rx — control nearly 80% of U.S. prescription drug distribution, serving about 270 million people. The report also noted that PBMs contributed to the closure of 10% of independent pharmacies in rural areas between 2013 and 2022.
An FTC spokesperson defended the report in the Wall Street Journal, telling the newspaper that "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."
When the report was released, Chair Khan added in a corresponding news release that PBMs have the power to hike drug costs and squeeze independent pharmacies, which many Americans, especially in rural areas, rely on for essential care. "The FTC will continue to use all available tools to scrutinize dominant players across healthcare markets and ensure that Americans have access to affordable healthcare,” Ms. Khan said.
However, FTC Commissioner Melissa Holyoak issued a dissenting statement, criticizing the report's process and lack of substantive engagement on policy. "[T]he report was plagued by process irregularities and concerns over the substance — or lack thereof — of the original order," she wrote. Ms. Holyoak further expressed concerns that the report would exacerbate ideological divides and erode the FTC's legitimacy, failing to provide a better understanding of PBM practices and their impact on consumers.
Cigna's lawsuit is available for review here.
[EXTERNAL LINK] - Cigna sues FTC over 'defamatory' PBM report
Express Scripts called the FTC's July report "seventy-four pages of unsupported innuendo" and claims the agency relied on "cherry-picked" information to push a predetermined narrative that PBMs inflate drug prices and disadvantage independent pharmacies.
In 2022, the FTC launched an inquiry into the PBM industry, requesting information and records from the six largest PBMs regarding their business practices. The Commission's corresponding report, published in July 2024, stated that PBMs favor their own pharmacies and exercise significant market control, affecting both medication access and affordability. The report also claimed PBMs sometimes steer patients away from cheaper drugs and overcharge for cancer treatments.
Express Scripts, in its lawsuit filed Sept. 17 in a St. Louis federal court, argues that the Commission's report, driven by bias and politics rather than evidence, falsely concluded that PBMs inflate drug costs and harm independent pharmacies. The company claims its business has been damaged by defamatory statements and unconstitutional actions and seeks a court ruling to invalidate the report, recuse Chair Khan, and recover legal costs. Andrea Nelson, Cigna Group's chief legal officer, stated that the goal of the suit is to have the report retracted and removed from the FTC's website.
"Express Scripts has been harmed, and continues to be harmed, by the Commission’s conduct," the lawsuit states. "It spent millions of dollars and thousands of personnel hours responding to a Commission 'study' that turned out to be a facade — mere cover for issuing the biased PBM report that the Commission and its chair planned to issue all along."
According to the FTC's report, the three largest PBMs — CVS Caremark, Express Scripts, and UnitedHealth's Optum Rx — control nearly 80% of U.S. prescription drug distribution, serving about 270 million people. The report also noted that PBMs contributed to the closure of 10% of independent pharmacies in rural areas between 2013 and 2022.
An FTC spokesperson defended the report in the Wall Street Journal, telling the newspaper that "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."
When the report was released, Chair Khan added in a corresponding news release that PBMs have the power to hike drug costs and squeeze independent pharmacies, which many Americans, especially in rural areas, rely on for essential care. "The FTC will continue to use all available tools to scrutinize dominant players across healthcare markets and ensure that Americans have access to affordable healthcare,” Ms. Khan said.
However, FTC Commissioner Melissa Holyoak issued a dissenting statement, criticizing the report's process and lack of substantive engagement on policy. "[T]he report was plagued by process irregularities and concerns over the substance — or lack thereof — of the original order," she wrote. Ms. Holyoak further expressed concerns that the report would exacerbate ideological divides and erode the FTC's legitimacy, failing to provide a better understanding of PBM practices and their impact on consumers.
Cigna's lawsuit is available for review here.
[EXTERNAL LINK] - Cigna sues FTC over 'defamatory' PBM report
