The judge held that the factual differences in each of the cases were “minimal and manageable.”
On November 14, 2024, Administrative Law Judge D. Michael Chappell ordered that the country’s largest pharmacy benefit managers (PBMs) have to face the FTC together in an administrative case. The case alleges that the three largest PBMs―Caremark, Express Scripts and OptumRX―used unfair rebate schemes to artificially inflate the price of insulin.
In mid-October, the PBMs each moved for separate proceedings, arguing that a consolidated trial could create confusion. The judge held that the factual differences in each of the cases were “minimal and manageable.” Judge Chappell noted that many of the respondents’ arguments regarding confusion of the evidence cited to authority regarding jury trials, but the current case is a bench trial.
The PBMs also argued that a joint trial could force them to release confidential business information to their competitors. Judge Chappell rejected this argument, noting that there already was a protective order in the case to prevent inappropriate disclosure.
The opinion goes on to emphasize that the cases arose from a single investigation and a single legal theory. Overall, the judge found that the similarities of the cases and the efficiencies associated with joint proceedings outweighed any risk of confusion of the issues.
As part of their bid for separate proceedings, the PBMs proposed holding joint hearings on common issues. The judge rejected that idea, arguing that separate trials with common hearings would only create more delays and higher costs.
There are still pending motions filed by the PBMs to disqualify three Democratic commission members from involvement in the case, including FTC Chair Lina Khan, alleging that they are biased against PBMs. Moreover, the PBMs have signaled an openness to challenging the constitutionality of the FTC’s structure, which has become common in enforcement actions.
This case involves allegations that the PBMs offered drug manufacturers favorable positions on their formularies in exchange for higher rebates. The lawsuit follows an interim report issued by the FTC regarding anticompetitive conduct by the PBMs.
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