The Case Without a Judge

Last September, the Federal Trade Commission sued three leading pharmacy benefit managers (PBMs) for conspiring to raise insulin prices by as much as 1,200 percent over the past two decades. It was a pretty juicy case: FTC staff had evidence that PBMs deliberately excluded the lowest-price insulins from their lists of which drugs they would cover, and instead preferred the highest-price insulins, which could pay out the highest rebates and therefore give the companies the biggest profits. There were chats where PBM executives said they were “addicted to rebates” and eager to “drink down the tasty … rebates.”

The case was issued as an “administrative complaint,” meaning that it goes through a different procedure than the federal courts. Formally speaking, an administrative law judge hears the case, but the commissioners of the FTC play a role as well. According to the standard procedure for an administrative complaint, the commissioners determine the schedule of the proceeding, issue final decisions on the scope of the findings and conclusions, allow intervenors to participate in the case, rule on motions filed by either side, and hear appeals to the administrative law judge’s rulings. In this sense, the commissioners are acting as judges for the purpose of this proceeding, and it’s a long-standing practice.

Only now, because of Donald Trump, the insulin case has no judges at the moment.

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When the commission agreed to move forward with the complaint in September, both Republicans, Melissa Holyoak and Andrew Ferguson, recused themselves from the case, because of work they both did at state-level enforcers on PBMs. (Quite good work, to be clear.) The other three who voted on the complaint, then, were the then-chair Lina Khan, and Democrats Rebecca Kelly Slaughter and Alvaro Bedoya.

Khan stepped down in January, and her replacement, Republican Mark Meador, has not yet been confirmed to his commissioner spot. Then on Tuesday, Donald Trump tried to fire the other two Democrats, Slaughter and Bedoya, claiming that he has the unitary power as the head of the executive branch to fire commissioners at independent agencies.

Slaughter and Bedoya plan to contest the alleged firing in court. But for the moment, they do not have the trappings of the office. They’ve been taken off the list of active commissioners at the agency’s website. Until the matter is decided legally, they’re not going to be allowed to hear this case. But who is?

At the moment, nobody. Donald Trump has created a situation where there is a serious alleged violation affecting millions of diabetics, and … there is no judge available to hear the case.

Unlike some other outstanding enforcement actions, the FTC cannot dismiss this case, because the only two commissioners left, Ferguson and Holyoak, have recused. Even when Meador comes aboard, it cannot dismiss it, because there won’t be a quorum of a majority of sitting members available to decide it. The agency cannot move forward on it either. So it exists in this netherworld, where millions of people, according to the complaint, are paying prices for insulin that are too high, but nobody can do anything about it.

Commissioner Bedoya was a guest on the podcast I co-host, Organized Money, on Thursday—you can listen here—and I asked him about this. “What is completely wild is, I don’t think anyone has any idea what’s going to happen to this case,” he said. “Right now we have no idea what’s going to happen to that lawsuit that staff alleges is critical to help people get access to cheap insulin.”

The FTC did not respond to a request for comment.

As I have reported, the attempted firings of appointed Democrats, which have been replicated across multiple independent government agencies, are part of a strategy to centralize power in the White House, and grant the president the power to fire any political appointee at any agency. This would break with 90 years of Supreme Court precedent, established in Humphrey’s Executor v. United States, where the Court unanimously ruled that a president could not fire an FTC commissioner without cause, which would violate the plain reading of the statute. FTC commissioners are not purely executive branch officials because they derive their authority from Congress and perform “quasi-judicial and quasi-legislative” functions, the Court ruled.

Indeed, that quasi-judicial function is precisely at issue in this insulin case. And President Trump, in a grab for power, has denied due process to millions of people suffering from high insulin prices by dubiously stripping these judges of their ability to judge.