FTC Case Against Drug Middlemen in Limbo After Trump Firings (1)

President Donald Trump’s move to fire two Democrats on the Federal Trade Commission leaves a question mark over the future of an agency antitrust action alleging pharmacy benefit managers used illegal rebate programs that spiked the price of insulin.

The FTC last September sued units of CVS Health Corp., Cigna Group, and UnitedHealth Group Inc. in its administrative court. The case gained bipartisan support in Washington, with key Republican lawmakers publicly backing it.

Commissioners have ultimate authority over decisions in the FTC’s in-house court. But at the time of their dismissal on March 18, Alvaro Bedoya and Rebecca Kelly Slaughter were the only commissioners overseeing the proceedings because the GOP members had recused themselves.

The case, which the PBMs are fighting to block, shines a spotlight on the downstream consequences of Trump’s attempt to fire Bedoya and Slaughter, who have each called the move illegal and vowed to challenge it in court.

“This is what people need to realize,” Bedoya said in an interview Thursday. “This is completely unprecedented and the only people that are going to win are the powerful and the wealthy.”

“No one has any idea” what this means for the prescription drug middlemen case, Bedoya added.

The FTC didn’t respond to a request for comment. Chairman Andrew Ferguson in a March 18 statement defended Trump’s right to fire Bedoya and Slaughter, saying it was within the president’s authority “to ensure democratic accountability for our government.”

PBM Action

The commission’s two Republicans, including then-minority Commissioner Ferguson, recused themselves when the Democrats voted 3-0 to authorize the PBM action. Former FTC Chair Lina Khan, who spearheaded the lawsuit, left the commission in January.

Trump tapped Republican lawyer Mark Meador to fill Khan’s vacancy. Yet even with his pending arrival, procedural rules may block the commission from the quorum needed to conduct business in the PBM case.

According to FTC rules, “a majority of the members of the commission in office and not recused from participating in a matter constitutes a quorum for the transaction of business in that matter.”

That means the Trump firings could be a “self-own on a purportedly shared priority” for Democrats and Republicans, said Hannah Garden-Monheit, a former FTC Office of Policy Planning director during the Biden administration.

The three pharmacy benefit managers stand accused by the FTC of accepting money from drugmakers in exchange for keeping less-expensive insulin off their lists of approved drugs.

The companies—CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx—deny the claims. They’re also pursuing a case in federal court arguing the FTC’s in-house forum is unconstitutional and the proceedings should be halted.

The case remains in active litigation, with a recommended decision from an administrative law judge for the commission’s review still months away. That would would theoretically give the administration plenty of time to resolve the recusal issues by then, Stephen Calkins, a Wayne State University law professor and former FTC general counsel, said.

But, Calkins noted, FTC lawyers in late February asked the commission to delay the start of an evidentiary hearing from August to January 2026, raising questions over whether the FTC can rule on that motion.

The FTC didn’t disclose why Ferguson and his Republican colleague Melissa Holyoak recused themselves from the vote. There’s potential they may no longer have a conflict of interest and could get involved in the case, Calkins added.

Reinstatement Fight

Bedoya and Slaughter, meanwhile, plan to fight for their reinstatement, which sets up a clash with the Trump administration over federal law stating that a president can’t fire an FTC commissioner without cause such as inefficiency or neglect.

The Justice Department has also said it will push for the Supreme Court to overturn a ruling that established removal protections for members of independent agencies.

If Trump is successful in the long run, this week’s firings could remake the FTC, legal experts say. But Bedoya on Thursday said the move “doesn’t hobble the FTC at all” in terms of conducting its business.

“Instead it opens the door to the remaining commissioners doing whatever the White House tells them to do,” he said. “Who wins from a world where big companies can call in a favor from the White House?”