EXCLUSIVE — Federal Trade Commission Chairwoman Lina Khan could face a possible ethics inquiry over allegations she violated the agency’s ethics rules by cracking down on pharmaceutical benefit managers while publicly positioning herself against the healthcare companies.
The American Accountability Foundation submitted a Freedom of Information Act request to the FTC on Wednesday, seeking access to all communications between Khan and other agency staff related to PBMs, the National Community Pharmacists Association, and other drug manufacturers, according to a copy of the request obtained by the Washington Examiner. The request comes after Khan appeared at an NCPA conference last year, during which she told the group they had "helped shape" her work on benefit managers.
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“Commissioner Khan's leadership at the FTC has been marred by a series of ethical lapses. Sadly, this is all too common in the Biden administration,” AAF President Tom Jones told the Washington Examiner. “Her recent efforts to put her thumb on the scale in the pharmacy benefit managers dispute is sad and problematic. This is the beginning of an investigation by AAF to get to the bottom of Khan's dealings and to hold her to account.”
During the conference, Khan appeared alongside NCPA executives who wore shirts depicting PBMs as vampires and labeling them as “bloodsuckers” as the chairwoman spoke about her work. In the months following the event, Khan later announced punitive actions she would be taking against PBMs, raising concerns about possible political motivation.
The FTC voted in July to walk back its stance on PBMs, noting its previous guidance to relax oversight no longer reflects current market guidelines. The new stance warns against relying on advocacy letters published between 2004 and 2014 that opposed mandatory transparency policies and regulatory measures for benefit managers.
Instead, Khan announced an inquiry into the PBM industry to investigate whether the former policies adequately oversee the health care companies — prompting an outcry from critics who say such a move ignores ethical guidelines to push forward a “progressive agenda.”
Many thanks to @Commpharmacy for the invitation and thoughtful discussion. Addressing unlawful business practices that are depriving Americans of affordable medicines and impeding fair competition is a top priority. https://t.co/ExlqVjpgHe
— Lina Khan (@linakhanFTC) October 3, 2022
“The FTC’s overreach isn’t just inappropriate. It will raise drug costs for every American,” said former Rep. Ryan Costello, who served on the House Oversight Committee from 2017 to 2019.
The FTC requires agency officials to act "impartially" and not give "preferential treatment to any private organization or individual," according to the commission's ethics guidelines. The rules also advise employees to "avoid any actions creating the appearance that they are violating the law or ethical standards," which AAF officials say were violated by Khan.
The most recent ethics complaint follows a similar inquiry by the House Judiciary Committee earlier this year about whether Khan has adhered to ethics advice given by the FTC's Designated Agency Ethics Official.
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The inquiry cited an instance in which Khan failed to recuse herself as a judge in a case against Meta Platforms despite the DAEO recommending she do so, raising concerns among House Republicans “about her commitment to the fair and impartial administration of the FTC’s authorities,” the committee wrote in June.
It’s not clear how quickly the latest complaint will move through the FTC, which told the Washington Examiner on Thursday they have no record of a request. A spokesperson for the agency declined to comment further.