The Federal Trade Commission has agreed to what it called a “landmark” settlement with Express Scripts, allowing the company to bow out of the agency’s lawsuit against major pharmacy benefit managers for allegedly inflating the cost of U.S. insulin.
In return, Express Scripts, which is owned by Cigna and is one of the largest PBMs in the country, has agreed to major changes to its drug benefit designs, including no longer preferring drugs with high list prices on its standard formularies when there are cheaper equivalents and delinking its compensation from the savings it negotiates with drugmakers, the FTC announced Wednesday.
Express Scripts has also agreed to increase transparency, including reporting more data on drug spending and disclosing any kickbacks to brokers that help employers choose PBMs.
Notably, the company also agreed to reshore its group purchasing organization Ascent from Switzerland back to the U.S.
GPOs, which aggregate PBMs’ members to improve their negotiating leverage with drugmakers, have been accused of facilitating shell games that allow PBMs to retain more drug rebates as profit, but oversight is tricky given no major GPOs are headquartered in the U.S.
The deal should drive down patients’ out-of-pocket costs for drugs like insulin by up to $7 billion over a decade, the FTC said. It should also bring millions of dollars in new revenue to community pharmacies by requiring Express Scripts to move its pharmacy reimbursement to a cost-plus model — a transition the PBM was already making.
The FTC sued Express Scripts, along with UnitedHealth’s Optum Rx and CVS’ Caremark, in September 2024, arguing the influential drug middlemen’s negotiating practices with drugmakers led them to prefer higher cost drugs, driving up the cost of lifesaving insulin. However, the agency suspended action against Express Scripts in late January to consider the proposed settlement.
The lawsuit against Optum Rx and Caremark is continuing.
This is a developing story and will be updated.
