CVS, UnitedHealth Want Nothing to Do With Lina Khan

It’s the postseason, so of course everyone is blaming the umpires. 

In September, the Federal Trade Commission filed a lawsuit against the three largest pharmacy benefit managers (PBMs) in the US — UnitedHealth, CVS, and Cigna — alleging they artificially inflated insulin prices. Now, the pharmacy middlemen are striking back. On Wednesday, the trio of PBMs asked FTC Chair Lina Khan and two other deputies to recuse themselves from the trial due to alleged biases.

Mad Middlemen

PBMs have long been in the crosshairs of monopoly-slayer Khan, who has become a political lightning rod. She has called PBMs “price gougers” in the past, and in 2022, attended an event hosted by the National Community Pharmacists Association — a group representing independent pharmacists who are quite vocal critics of industry giants. For UnitedHealth, CVS, and Cigna, it’s all evidence of a “prejudged” case by the regulator. In a motion seen by Reuters to dismiss Khan from the FTC’s in-house court trial, the defendants flagged the National Community Pharmacists Association event as evidence, writing that “attendees wore anti-PBM paraphernalia, including pins that vilified PBMs as ‘bloodsuckers’ and shirts depicting PBMs as vampires.”

It’s not the first time Khan has been targeted: 

• Way back in 2021, Amazon argued that Khan must recuse herself from ongoing antitrust probes of the e-commerce and cloud computing titan, pointing to past comments criticizing the company as evidence of impartiality. Meta made a similar argument a year later.
• Both efforts failed, with Khan claiming she was advised that ethics rules left the decision of recusal up to her, given her lack of financial conflicts. In the Meta case, one FTC ethics official did recommend Khan recuse herself based on previous comments, though a Wall Street Journal investigation of public records found the official held as much as $50,000 in Meta stock at the time of the recommendation.

No Khan Do: Khan’s recusal in the PBM case appears unlikely, though the Biden appointee may not be in her office much longer anyhow. Last week, the WSJ reported that while seeking the Teamsters union’s endorsement, Vice President Kamala Harris’ campaign team would not promise to keep Khan as chair if she wins the election (the Teamsters ultimately decided not to endorse either presidential candidate). And on Wednesday, billionaire donor and campaign surrogate Mark Cuban suggested to Semafor he’d prefer Khan’s removal — sparking near-immediate backlash from the Democratic Party’s left flank.