Giant insurer objects to the truth
By Philip Mattera, director of the Corporate Research Project for the Dirt Diggers Digest
Pharmaceutical companies, the big pharmacy chains and the middlemen known as pharmacy benefit managers, or PBMs, have been taking pains to blame one another for the high cost of prescription drugs. It is not unusual for business groups with conflicting positions to engage in this sort of finger-pointing, but now a major PBM is attacking a federal regulatory agency for criticizing its practices.
In
a highly unusual and objectionable step, Cigna, parent of PBM Express Scripts,
has filed a lawsuit against the Federal Trade Commission, seeking to force the
agency to retract a recent interim report depicting PBMs as
“powerful middlemen inflating drug costs and squeezing main street pharmacies.”
The
FTC report points out that the market for PBM services has become highly
concentrated, and the largest PBMs are now owned by the largest health insurers
(as in Cigna’s ownership of Express Scripts) or pharmacy chains (CVS control of
Caremark). “As a result of this high degree of consolidation and vertical
integration,” the report states, “the leading PBMs can now exercise significant
power over Americans’ access to drugs and the prices they pay.”
Cigna
is certainly within its rights to disagree with and criticize the report, as
the company did in a full-page advertisement in the Wall Street Journal. Yet
Cigna did more than that. Its lawsuit, filed in federal court in Missouri,
accuses the FTC of defamation and of violating the company’s due process
rights. It seeks to have the report expunged from the FTC website along with
“any other relief the Court deems just and equitable.”
Although the complaint does not explicitly ask for monetary damages, the action bears a close resemblance to the SLAPP suits filed by corporations seeking to silence their critics by causing them severe financial harm. This kind of tactic is seen, for example, in the lawsuit being pursued against Greenpeace by the pipeline company Energy Transfer. Like the SLAPP suits brought against NGOs, the Cigna action seems designed to intimidate—both the FTC and by extension its other critics.
Cigna’s
claim it has been defamed ignores the fact that the company’s track record is
hardly unblemished. Violation Tracker contains more than 200 entries for Cigna
and its subsidiaries, with total penalties of $746 million.
Express
Scripts accounts for about $30 million of that total, stemming from cases such
as a $3.2 million settlement with the
Massachusetts Attorney General in 2022 to resolve allegations the company
failed to follow prescription pricing procedures designed to keep costs down
and prevent overcharges in the state’s workers compensation insurance system.
Accredo,
a specialty pharmacy owned by Express Scripts, paid $60 million in 2015 to resolve federal
allegations that it received illegal kickbacks, in the form of patient
referrals and other benefits, from the pharmaceutical company Novartis in
exchange for promoting refills for its drug Exjade.
It
is unacceptable for Cigna, or any other company, to seek to muzzle a federal
regulator through the use of the legal system. Hopefully, the court will see
the danger of this lawsuit and dismiss it promptly.