Eighth Circuit Hears Challenge to FTC Action Over Insulin Costs

Judges on a federal appeals court questioned pharmacy benefit managers Wednesday over the merits of their case against the Federal Trade Commission, which seeks to halt the agency’s internal proceedings against them over insulin prices.

The Cigna Group’s Express Scripts Inc., CVS Caremark Rx LLC, and UnitedHealth Group’s OptumRx Inc. sued the FTC in November 2024, alleging the agency’s administrative action violated Article II, Article III, and the due process clause of the US Constitution.

Other divisions of the insurers, including their overseas group purchasing organizations, are also appellants in the lawsuit at the US Court of Appeals for the Eighth Circuit.

The case is unfolding against a larger backdrop of scrutiny on the big three pharmacy benefit managers and the health insurers that own them, as President Donald Trump and lawmakers on both sides of the aisle look to tighten the screws on their business practices. Critics claim PBM tactics to negotiate manufacturer rebates drive up drug prices, while PBMs say the rebates help health plans keep premiums low.

The lawsuit challenges the fact that the case was filed in administrative court rather than federal district court, which the companies argue denies them a fair review.

Daniel Volchok, partner at Wilmer Cutler Pickering Hale and Dorr LLP, said the FTC has a 30-0 record with its internal proceedings over the past 25 years.

“The key point is that the FTC has fared far worse when it has brought claims in an Article III court, where, of course, it does not get to judge the merits of its own allegation,” Volchok argued in the PBMs’ defense. “There is instead a truly neutral arbiter.”

The case also alleges that FTC commissioners are improperly insulated from removal.

But the Department of Justice noted that Trump previously fired two FTC commissioners. The agency also argued the companies have not been directly harmed by removal restrictions since Trump hasn’t said or done anything critical of the FTC’s actions against the PBMs.

“There’s been no showing that the president is displeased with how this adjudication is going,” DOJ attorney Daniel Aguilar said.

Judge Matthew T. Schelp of the US District Court for the Eastern District of Missouri previously denied the PBMs’ request for a preliminary injunction in February, indicating the companies were unlikely to succeed on their claims.

Eighth Circuit Judge Bobby E. Shepherd on Wednesday questioned whether the court should weigh in at the preliminary injunction stage, noting that there were very few court precedents.

“Personally, it doesn’t give me a lot of comfort and reassurance that this is really an area that we need to be getting into on a preliminary basis,” he said.

The FTC alleges that PBMs created an illegal rebate system to generate excess profits and keep lower-cost insulins off of their drug formularies.

The agency also released a report in July 2024 outlining anticompetitive tactics against other types of drugs, which Express Scripts sued over. That case is paused pending the Eighth Circuit’s decision.

The case is Express Scripts, Inc. v. FTC, 8th Cir., No. 25-01383, oral arguments heard 11/19/25.