The Federal Trade Commission has put the brakes on its lawsuit against the three biggest pharmacy benefit managers (PBMs), and not everyone is happy about it.
Lina Khan, who served as FTC chair under President Joe Biden, criticized the agency’s decision to pause the case on X on Monday. “Last year we sued the 3 largest pharmacy benefit managers for illegal tactics that inflate the cost of insulin & other drugs,” she wrote.
“The FTC has now indefinitely paused the case. This follows the White House’s unlawful attempt to fire Commissioners Bedoya & Slaughter. A gift to the PBMs.”
Lawsuit on Hold After Commissioner Firings
The case targets CVS Caremark, Express Scripts (owned by Cigna), and OptumRx (a unit of UnitedHealth Group). Together, these three companies handle nearly 80% of all prescription drug claims in the U.S.
The FTC filed the lawsuit in September 2024, accusing the PBMs of using anticompetitive rebate schemes to inflate the list prices of insulin and block access to cheaper alternatives.
But on April 1, the FTC granted a stay in the proceedings. The reason? The commission is now effectively paralyzed. Democratic Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter were fired by President Donald Trump in March.
The two remaining commissioners, both Republicans, have recused themselves from the case. With no eligible members left to oversee the matter, the agency said it had no choice but to pause the lawsuit for at least 105 days.
An evidentiary hearing has been scheduled for 225 days after the stay is lifted, though the future of the case remains uncertain.
Impact on Patients and Pharmacies
The FTC originally argued that the PBMs created exclusionary drug formularies starting in 2012, demanding higher rebates from drugmakers in exchange for preferred placement.
Those costs were not passed on to patients, despite industry claims to the contrary. One example cited in the complaint: the price of Novo Nordisk’s Novolog U-100 more than doubled from $122.59 in 2012 to $289.36 in 2018.
The American Economic Liberties Project called the pause a serious setback. “This case is a lifeline to all those harmed by PBMs’ unfair and abusive business practices,” said Emma Freer, Senior Policy Analyst for Health Care at the group.
She said the pause affects “vulnerable patients, who increasingly cannot afford essential medications; independent pharmacies, which are closing in droves; employers and other health plan sponsors, which are cutting wages and employee benefits to offset rising prescription drug costs; and taxpayers, who often foot the bill.”
The group also called on the White House to reinstate Bedoya and Slaughter, warning that each day of delay “needlessly puts patients’ lives at risk.”
Bipartisan Support for PBM Reform
Despite the current stall, PBM reform has gained support on both sides of the aisle. President Trump has backed efforts to crack down on the industry, even as his administration’s actions have complicated the FTC’s legal strategy.
The PBMs have pushed back hard, filing a countersuit in November. They argued the FTC was overstepping and claimed that drug manufacturers, not middlemen, were to blame for rising costs.