The Federal Trade Commission announced on July 14 a settlement agreement with Caremark Rx LLC and Zinc Health Services LLC, collectively known as Caremark, one of the nation’s largest pharmacy benefit managers. The agreement marks another step in the Commission’s efforts to reduce healthcare costs for Americans.
Caremark has agreed to implement changes aimed at lowering patients’ out-of-pocket expenses, increasing transparency, and ensuring fair treatment of community pharmacies. Chairman Andrew N. Ferguson said, “The FTC under President Trump won’t stand for anticompetitive behavior that drives up prices for American consumers. The settlement with Caremark brings billions in real savings to consumers feeling the pinch from excessive prescription drug prices. And the settlement bars Caremark from interfering with hub pharmacies, which can help identify the lowest out-of-pocket option for patients and improve patient access to prescriptions. Today’s action builds on previous wins for President Trump’s healthcare agenda, including innovations like TrumpRx to make prescription drug prices more transparent and affordable for everyone.”
According to the FTC, this settlement is expected to secure up to $8.5 billion in consumer savings over ten years and unlock an additional $4.5 billion through point-of-sale rebates over the same period. Similar to a prior agreement reached with Express Scripts Inc., it delinks PBM fees from drug list prices, enhances transparency measures, and allows retail community pharmacies an opportunity to move toward a cost-plus reimbursement model.
The settlement addresses concerns about interference by Caremark—a CVS Health Corporation subsidiary—with patient access to hub pharmacy services that help facilitate more convenient and affordable prescription drug access. These concerns were outlined in a House Judiciary Committee Interim Staff Report titled “When CVS Writes the Rules: How CVS Protects Itself From Innovation and Competition.” The agreement prevents unfair interference by Caremark regarding pharmacies’ ability to work with hub service providers.
The lawsuit alleged that Caremark—alongside Express Scripts Inc. (ESI) and Optum—artificially inflated insulin list prices through anticompetitive rebating practices that ultimately shifted higher costs onto vulnerable patients whose payments are tied directly to those list prices.
Under terms of the proposed consent order settling this case, Caremark must cease discrimination against low-cost drugs on its formularies; ensure rebates are passed through at point of sale; allow plan sponsors flexibility regarding rebate guarantees; delink manufacturer fees from list pricing; increase transparency; include certain terms benefiting retail community pharmacies; maintain group purchasing organization activities within the United States; cap members’ insulin out-of-pocket costs via affordability programs unless opted out by plan sponsors; and refrain from unfairly interfering with network pharmacies working alongside hub service providers.
A monitor will oversee compliance related specifically to pharmacy-hub interactions as part of these requirements. Hubs are digital platforms designed both for improving medication access/adherence and streamlining financial assistance or delivery logistics for patients.
Public comments on this proposed consent agreement will be accepted over 30 days before any final order is issued by the Commission.