Cigna’s Express Scripts (CI), one of the nation’s major pharmacy-benefit managers PBMs), has sparked a significant legal showdown with the Federal Trade Commission (FTC). The company filed a lawsuit in federal court in St. Louis on Tuesday, demanding the FTC retract a recent report criticizing the industry’s practices. According to the lawsuit, Express Scripts deems the FTC’s July report as “seventy-four pages of unsupported innuendo” and accuses FTC Chair Lina Khan of bias against the pharmacy-benefit sector. Express Scripts claims the report unfairly targets PBMs, which are integral in negotiating drug prices.
FTC Stands Firm Despite Lawsuit
The FTC, however, remains resolute in defending its report. According to the agency, “Just three companies control nearly 80% of the market that millions of Americans must use to purchase necessary drugs at high costs.” This report, detailed by The Wall Street Journal, suggests that these companies sometimes direct patients toward more expensive medications and overcharge for critical treatments like insulin and cancer therapies. The FTC’s investigation aims to shed light on the opaque practices of these major players in the drug pricing sector.
Cigna Demands the FTC Retract and Remove Its Report
Express Scripts argues that the FTC’s report is flawed and biased, claiming it ignored substantial evidence provided by the company. The lawsuit demands that the court not only retract the report but also order its removal from the FTC’s website. Cigna’s legal action, which seeks to retract and remove the FTC’s findings, could influence future regulatory scrutiny and public perception of drug pricing practices in the U.S. The outcome of this lawsuit may affect how PBMs negotiate drug prices and their role in managing healthcare costs.
Is Cigna Undervalued?
Analysts remain optimistic about CI stock, with a Strong Buy consensus rating based on nine Buys and two Holds. Over the past year, CI has increased by more than 25%, and the average CI price target of $398.45 implies an upside potential of 10.84% from current levels.
