An Eighth Circuit panel had only a handful of questions on Wednesday for the pharmacy benefit managers accused of inflating insulin prices, though one of the judges expressed skepticism about pausing the Federal Trade Commission's in-house enforcement action on constitutional grounds.

CVS' Caremark, Cigna's Express Scripts and UnitedHealth's OptumRx units urged the appeals panel during oral arguments to reverse a lower court's refusal to issue a preliminary injunction that would block the FTC's administrative proceedings while their constitutional challenge plays out.

Daniel S. Volchok of WilmerHale, an attorney for the companies, said their overarching argument is that Congress impermissibly gave the FTC power that the Constitution assigns to the federal courts and to the president.

"With that power, the FTC is bringing coercive, highly consequential internal proceedings against private parties, proceedings in which it has, in recent years, always ruled for itself," Volchok said Wednesday.

The FTC brought the in-house case in September last year, accusing the so-called Big Three PBMs of using rebate schemes that prioritize insulin drugs with high list prices and prevent patients from accessing lower-priced drugs.

The companies' constitutional challenge targets restrictions that prevent FTC commissioners and the agency's administrative law judges from being removed by the president without cause. The case also alleges that the FTC's in-house proceedings violate the due process clause and Article III of the Constitution by allowing the commission to adjudicate private rights in an agency proceeding instead of federal court.

U.S. Circuit Judge Steven M. Colloton asked Volchok on Wednesday to discuss the requirements for a showing of harm from the constitutional violations, since the commission acknowledges that the removal restrictions are unconstitutional.

The commission has abandoned its defense of the U.S. Supreme Court's 1935 decision in Humphrey's Executor v. United States , which specifically upheld the FTC Act's removal protections for commissioners. President Donald Trump also fired the FTC's two sitting Democratic commissioners earlier this year without cause; one of them is challenging her removal in a petition to the Supreme Court.

Volchok said Wednesday that the commission is taking the position that the PBMs need to show "compensable harm" from the removal restrictions, but argued that this improperly imports remedy issues into the merits analysis. The cases the FTC relies on, he said, tell the court nothing about what's needed to obtain an injunction blocking future conduct and instead deal with retrospective relief for things that happened in the past.

U.S. Circuit Judge Bobby E. Shepherd asked Volchok if he could cite any cases where a court of appeals upheld a preliminary injunction or reversed a lower court's denial of a preliminary injunction against an ongoing agency proceeding based on a structural constitutional challenge.

Volchok pointed to the Fifth Circuit's August ruling upholding injunctions barring the National Labor Relations Board from prosecuting unfair labor practice cases against SpaceX based on removal protections for board members. But after a follow-up from the judge, Volchok acknowledged that's the only case he's aware of so far.

"Because of that, doesn't that really caution extreme, extreme care and hesitancy on the part of the court to sustain this kind of challenge on a preliminary basis?" Judge Shepherd responded. "It's effectively a case where this kind of attack has been successful, with respect to a preliminary injunction. It doesn't give me personally ... a lot of comfort in reaching reassurance that this is really an area that we need to be getting into on a preliminary basis."

Volchok noted that a preliminary ruling would be based on a showing of likely success and could be revisited as the case proceeds, but said the companies believe the removal protection claim speaks directly to the SpaceX ruling.

"I'm not aware of case law saying that a court should not be the first, or in this case the second, to uphold an issue," he said, noting that the PBMs also allege they'll be irreparably harmed without a preliminary injunction because they'll be exposed to the unconstitutional proceedings.

U.S. Department of Justice attorney Daniel Aguilar argued for the FTC on Wednesday that harm needs to be shown from the removal protections, because there is no risk of harm if the agency is acting consistently with the president's wishes.

"The president wishes the law to be executed this way, and his subordinates are fulfilling his wishes," he said. "What they say is they are entitled to a preliminary injunction now solely based on the existence of an unconstitutional removal restriction without any showing that the president disputes the FTC's current actions."

Aguilar acknowledged that the government believes the removal restrictions are unconstitutional and referenced the ongoing Supreme Court challenge, but argued that the remaining commissioners have continued the case without any sign that the president is displeased.

On the Article III claim, Aguilar contended that Congress passed the FTC Act in part to create a right of action to challenge conduct the agency deems "unfair methods of competition" because there was previously no law specifically covering that type conduct.

"Congress is permitted to create things that are new and unknown to the common law, and thereby making them public rights," he said.

He said immigration and tax cases are other examples of cases that can involve private contracts that can still be decided by the executive branch.

On rebuttal, Volchok argued that "unfair methods of competition" have been recognized for centuries and said there "simply is no binding precedent" that rejects the PBMs' arguments. He also pointed to the Supreme Court's 2023 ruling in Axon v. FTC , in which the justices found targets of commission enforcement actions can bring constitutional challenges against the agency in federal court before going through the agency's in-house administrative process.

Volchok said this supports the companies' contention that they have shown irreparable harm from the removal restrictions through exposure to the in-house proceeding.

"The question is not, 'What would we be entitled to later?' The question is whether we are entitled to a preliminary injunction now to freeze the status quo to avoid irreparable harm while our claims are being adjudicated," he said.

U.S. Circuit Judges Steven M. Colloton, Bobby E. Shepherd and Ralph R. Erickson sat on the panel for the Eighth Circuit.

Caremark is represented by Steven A. Engel, Michael Cowie and Rani Habash of Dechert LLP.

OptumRx is represented by Matthew S. Rozen, Theodore J. Boutrous Jr. and Samuel Liversidge of Gibson Dunn & Crutcher LLP.

Express Scripts is represented by Kyle T. Edwards of WilmerHale and Charles F. Rule, Daniel J. Howley and Derek W. Moore of Rule Garza Howley LLP.

The FTC is represented by Yaakov M. Roth, Sayler A. Fleming, Joshua M. Salzman and Daniel Aguilar of the U.S. Department of Justice.

The case is Express Scripts Inc. et al. v. FTC et al., case number 25-1383, in the U.S. Court of Appeals for the Eighth Circuit.