Chaos at the FTC as Lack of Commissioners Temporarily Freezes Price Fixing Case Against Pharmacy Benefit Managers
On April 1, 2025, the Federal Trade Commission (FTC) filed for a stay in a case against three Pharmacy Benefit Managers (PBMs), not because of any lack of evidence, but rather because there was no one left at the FTC to pursue the case due to recent firings by the current administration. When the suit was filed, it was supported by the three Democrat Commissioners, and the two Republican Commissioners recused themselves. A last-minute reversal of a previous recusal may have put the suit back into motion, but the entire situation reflects the rapidly changing nature of the FTC and raises questions about the FTC’s ability to police anticompetitive actions.
History of the Case
On September 20, 2024, the FTC sued the largest three PBMs (who collectively administer about 80% of all prescriptions in the United States and are each vertically integrated with a major national insurer), claiming that they engaged in anticompetitive and unfair rebating practices. The lawsuit alleged the PBMs rigged the pharmaceutical supply chain competition in their favor, thereby artificially inflating the price of insulin and raising costs for diabetes patients. The suit followed a report showing how the market power of the PBMs allows them to manipulate prices at the expense of patients. The FTC’s press release stated, "even when lower list price insulins became available that could have been more affordable for vulnerable patients, the PBMs systemically excluded them in favor of high list price, highly rebated insulin products.” The statement also noted that in 1999, the average list price of a brand-name insulin medication manufactured by Eli Lilly was only $21, but by 2017, the price of this drug was over $274, an increase of over 1,200%. By 2019, one out of every four insulin patients could not afford their medication.
In recent years, the United States Congress has begun to pay attention to PBM activity, with a variety of legislation being introduced in an attempt to rein in the PBMs. At the time the suit was filed, Republican Representative Buddy Carter stated, "I applaud FTC Chair Lina Khan for taking this critical step and sending a message that PBMs' days of abusing patients are coming to an end. It is time to bust this monopoly up for good.”
Firings at the FTC
The FTC is led by five Commissioners, serving seven-year terms. No more than three Commissioners may be from the same political party. At the time the PBM suit was filed, there were three Democratic Commissioners and two Republican Commissioners. When Democrat Lina Khan resigned on January 31, 2025, this left two Democratic and two Republican Commissioners.
On March 18, 2025, the two Democrat FTC Commissioners received an email from the White House stating they were fired immediately and without legal cause. The two remaining Republican Commissioners had already recused themselves from the PBM case, leaving no Commissioners available to pursue the suit. (A third Republican, Mark Meador, was nominated to be an FTC Commissioner. His confirmation was initially blocked by Democrats to protest the firing of the Democrat FTC Commissioners, but he has just been confirmed.)
The fired Democrat Commissioners filed suit to overturn their firings, asking the court to allow them to finish their terms (one was to end in 2026, one in 2029). The suit relies on precedent from Humphrey’s Executor v. United States, a 1935 Supreme Court case that held that an FTC commissioner could be fired only for cause because the agency performed quasi-legislative and quasi-judicial functions. The two current Republican Commissioners have stated support for overturing Humphrey’s Executor, with one – FTC Chairman Andrew Ferguson – issuing a statement supporting the legality of the firings. On February 12, 2025, the Acting Solicitor General issued a letter stating that the Department of Justice "has determined that certain for-cause removal provisions … are unconstitutional and that the Department will no longer defend their constitutionality," explicitly mentioning Humphrey’s Executor. In a similar case involving the firing of Democratic members of the National Labor Relations Board and the Merit Systems Protection Board, the US Court of Appeals for the District of Columbia upheld Trump’s firings.
Filing for Stay
On March 31, 2025, the FTC submitted an order seeking an administrative stay in the PBM/Insulin pricing case, as no current Commissioners could participate. The order stated, "[i]n this proceeding, the Commission lacks a quorum, no Commissioner is participating, and the parties have jointly submitted a Proposed Order setting out the terms of their requested stay and have waived their right to Commission review of the motion.”
The PBMs viewed this development positively, with CVS stating they are “confident the facts are on our side — drugmakers alone set the price of insulin — and we will continue to defend the case vigorously to protect our ability to make insulin affordable for American businesses and their members.” Former FTC Chair Lina Khan called the stay "a gift to the PBMs."
Reversing the Recusal
On Thursday, April 3, 2025, after consulting with ethics attorneys at the FTC, Chair Andrew Ferguson reversed his previous recusal, making him eligible to join the case. Ferguson stated on X that his previous recusal was based on work he did as Virginia’s solicitor general, advising the state’s Attorney General about whether to file an amicus brief in a class action case against PBMs. Even if Chair Ferguson can rejoin the case, whether one FTC Commissioner is sufficient to form a quorum is debatable.
With Ferguson back on the case, the timeline for preceding is murky. If the earlier stay remains in place, the case would be delayed for 105 days, with an evidentiary hearing set for 225 days after the stay ends.
Future of the FTC
Regardless of how the PBM case moves forward, questions remain about the future of the leadership of the FTC. The pending case challenging the legality of the FTC Commissioner firings could result in the two Democrats being reinstated. However, failing this, there would be a variety of options open to the White House. First, the President could nominate two other Democrats, with the security that the three Republican Commissioners would constitute a majority and allow the President to pursue his agenda. Second, while the FTC Act states no more than three Commissioners may be from the same party, nothing requires the other two to be from the opposition party. The President could nominate independent Commissioners or someone representing a party such as the Libertarians. Third, the President could simply choose to nominate Republicans for the final two seats and let the courts settle that issue as well. Finally, the FTC frequently operates with fewer than five members, and the President is not obligated to appoint more members. The White House could simply choose to leave the other two Commissioner positions unfilled and have the FTC proceed with only three Commissioners.
The FTC plays a critical role in addressing issues of healthcare antitrust enforcement and working to ensure healthcare markets remain competitive. The uncertain nature of the FTC's future and its leadership creates a great deal of insecurity about how the competitiveness of healthcare markets will be policed moving forward.