The Federal Trade Commission (FTC) has reached a settlement with Express Scripts, Inc. and its affiliated entities, one of the country’s largest pharmacy benefit managers (PBMs). The agreement requires Express Scripts to implement changes in its business practices aimed at increasing transparency and reducing out-of-pocket costs for patients. According to the FTC, these measures are projected to lower drug expenses, including insulin, by up to $7 billion over the next decade and provide new revenue streams for community pharmacies.
The settlement resolves an FTC lawsuit that accused Express Scripts of inflating insulin prices through anticompetitive rebating practices. The complaint stated that these actions limited access to more affordable products and increased costs for patients.
“The FTC’s settlement with Express Scripts is a clear testament to the Trump-Vance FTC’s focus on lowering healthcare costs for American patients,” said FTC Chairman Andrew N. Ferguson. “The FTC’s settlement with ESI will end its business practices that have kept drug prices high, ultimately providing meaningful financial relief to American patients who depend on ESI to access life-sustaining prescription drugs as well as community pharmacies who will see new revenues each year and relief from being squeezed. It also delivers significant wins for the broader Trump-Vance healthcare agenda, including reshoring major portions of ESI’s business, ensuring regulatory compliance with price transparency laws, requiring disclosures of kickbacks to brokers, and paving the way for Americans to participate fully in TrumpRx.”
The FTC also alleged that Express Scripts and other PBMs created systems favoring rebates off list prices rather than lower net prices. This practice reportedly led manufacturers—especially of insulin—to compete based on rebate size instead of actual cost reductions, resulting in higher out-of-pocket payments for consumers whose copays or coinsurance were linked to inflated list prices.
Under the proposed consent order, Express Scripts has agreed to several commitments:
- It will stop prioritizing higher-cost drug versions on its standard formularies when identical lower-cost options exist.
- Plan sponsors will be offered plans where patient expenses are based on net drug costs instead of list prices.
- Covered access to TrumpRx will be provided as part of standard offerings if legal conditions change.
- All members will receive full benefits from the Patient Assurance Program's insulin coverage when applicable unless plan sponsors opt out in writing.
- A transition option away from rebate guarantees and spread pricing will be available for all plan sponsors.
- Drug manufacturer compensation tied to list prices will be delinked.
- Greater transparency will be required through mandatory reporting at the drug level and disclosure of broker payments.
- Community pharmacies’ compensation models will shift toward reimbursement based on acquisition cost plus dispensing fees.
- These standard offerings must be promoted among plan sponsors and pharmacies.
- The group purchasing organization Ascent will move operations from Switzerland back to the United States, returning over $750 billion in purchasing activity during the order’s term.
The consent agreement was accepted by a 1-0 Commission vote with Commissioner Meador recused. Public comments on the proposed agreement are open for 30 days before final approval.
Once finalized, this consent order carries legal weight for future conduct by Express Scripts.
