By Dave Michaels and Joseph Walker

The Federal Trade Commission's lawsuit against three large pharmacy-benefit managers over insulin prices is on hold after President Trump fired two of the agency's commissioners.

The FTC this week halted a lawsuit against the country's largest drug middlemen, which negotiate drug prices for employers and insurers. The FTC said it needs to pause the litigation because its two remaining commissioners, both Republicans, are recused from the case, leaving none to oversee it.

The antitrust enforcer in September 2024 sued Cigna's Express Scripts, UnitedHealth Group's Optum Rx and CVS Health's CVS Caremark, accusing the firms of inflating the price of insulin. The lawsuit said firms profited by pocketing the discounts they had negotiated for the higher-priced insulin products they steered their customers to buy.

The FTC said in a court filing that the companies had agreed to put the case on hold for at least 105 days.

"CVS Health is confident the facts are on our side -- drugmakers alone set the price of insulin -- and we will continue to defend the case vigorously to protect our ability to make insulin affordable for American businesses and their members," the company said in a statement.

An Express Scripts spokeswoman called the case baseless, adding that "if the FTC continues its misguided attack on PBMs, there won't be anyone to stop pharmaceutical manufacturers from raising drug prices even faster."

PBMs have come under bipartisan scrutiny in Congress and are the target of multiple pieces of legislation aimed at reining them in. Critics contend that PBMs wring large rebates from pharmaceutical companies that aren't always passed on to their clients, including employers, insurers and labor unions. When patients are made to shoulder a portion of a drug's cost, they are usually charged the drug's list price, which doesn't take into account those rebates.

Some lawmakers and regulators say that PBMs have grown too powerful through consolidation. The three biggest PBMs are owned by companies that control large health insurers -- CVS Health's Aetna, Cigna and United Healthcare -- and operate their own pharmacies.

An FTC report released in the waning days of the Biden administration found that the PBMs paid out higher prices for many drugs that were dispensed through their own pharmacies. The PBMs said the report was misleading and failed to address the fact that drugmakers set list prices and are the underlying cause of high drug prices.

Trump has also criticized the drug managers. In December, he vowed to "knock out the middleman," telling reporters that "the horrible middleman...makes more money frankly than the drug companies, and they don't do anything except they're a middleman."

The FTC at full strength has five members, and no more than three commissioners can be from the same party. The commission was down to four members last month before Trump fired Democratic commissioners Alvaro Bedoya and Rebecca Slaughter. That reduced the commission to two members: Chairman Andrew Ferguson and Commissioner Melissa Holyoak.

Ferguson and Holyoak didn't vote to authorize the lawsuit against the pharmacy-benefit managers, saying they were recused without explaining why. Ferguson and Holyoak formerly worked as the solicitors general of Virginia and Utah, respectively.

The Republicans have been involved in other FTC matters focused on the drug managers. Both voted in January, for instance, to issue the broader report examining the business practices of PBMs and their affiliated pharmacies.

Bedoya and Slaughter have challenged their terminations in federal court. Firing them runs counter to current Supreme Court precedent that says the FTC's commissioners can only be removed for cause. The Trump administration has been clear that it is eager to see that precedent overturned.

Write to Dave Michaels at dave.michaels@wsj.com and Joseph Walker at joseph.walker@wsj.com

(END) Dow Jones Newswires

April 02, 2025 14:20 ET (18:20 GMT)

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