backOn February 4, 2026, the Federal Trade Commission (FTC) announced what it called a “landmark” settlement with Express Scripts, Inc. (ESI) in its enforcement action alleging anticompetitive practices under Section 5 of the FTC Act based on claimed abuses of formularies and rebates for insulin drugs. The FTC filed suit in 2024 against the three largest pharmacy benefit managers (PBMs) in the United States—ESI, Caremark Rx, and OptumRx—and their affiliated group purchasing organizations (GPOs)—Zinc Health Services, LLC, Ascent Health Services LLC, and Emisar Pharma Services LLC.
The FTC, ESI, and Ascent Health Services entered into a consent decree to resolve the FTC’s claims. Most of the settlement provisions apply to all drugs managed by ESI (not just insulin), and it carries broad implications for pharmaceutical manufacturers navigating formulary access, drug pricing, and reimbursement relationships with PBMs. The current settlement applies only to drugs managed by ESI, but could be a template for future settlements in the FTC’s ongoing case against the other two big PBMs.
Moreover, it is unlikely a coincidence that this settlement was announced just a day before the launch of the TrumpRx platform, which as explained below, was an important feature of the settlement, and on the heels of PBM reform legislation that was signed into law hours before the FTC announced its settlement with ESI.
Background
On September 20, 2024, the FTC filed its administrative complaint against the PBMs and their GPOs. The Commission alleged that the “prescription drug affordability crisis” in the United States was driven in part by the PBMs’ and GPOs’ “manipulation of drug price competition for their own gain.”
The Commission claims that PBMs introduced “restrictive formularies” to “completely exclude certain drugs from coverage,” creating significant risk to manufacturers that their products would be “excluded outright from insurance coverage for tens of millions of patients.” The Commission further alleges that the PBMs “[l]everag[ed]” that “threat of exclusion” and “began demanding higher and higher rebates from drug manufacturers in exchange for placing those drugs on their restrictive formularies.” In just a single year, the Commission noted, one of the PBMs collected billions of dollars in rebates and fees.
The FTC alleges that the PBMs violated Section 5 of the FTC Act by disadvantaging, or excluding, low list price insulin products from commercial formularies in favor of high list price insulin products in order to capture higher rebates and fees, while designing prescription benefit plans that failed to pass through discounts and rebates to patients.
Although these allegations are focused on conduct relating to insulin, the FTC’s complaint states that the conduct extended to other drugs, including treatments for autoimmune diseases and inflammatory conditions. As a result, the remedies the FTC seeks are much broader in scope and apply to all drugs. The proposed remedies in the complaint include prohibiting the PBMs and GPOs from: (1) excluding or disadvantaging low WAC versions of high WAC drugs made by the same manufacturers whenever the high WAC drug is covered on a formulary; (2) accepting compensation based on a drug’s list price or a related benchmark; and (3) designing a benefit plan that bases patients’ deductibles or coinsurance on the list price, rather than net cost.
The case for the two remaining PBMs is headed for an evidentiary hearing on June 17, 2026.
ESI’s Consent Decree
FTC has resolved its complaint against ESI and its GPO, Ascent, through a consent decree that includes specific behavioral remedies that must be implemented no later than January 1, 2027. The decree is effective for ten years. These remedies include:
- Low-WAC nondiscrimination (Section I): Stop preferring high list price versions of a drug over low list price versions of the same drug on its standard formularies.
- Member cost-sharing tied to net cost (Section II): Provide a standard offering to its plan sponsors that ensures members’ out-of-pocket expenses will be based on the drug’s net cost rather than list price.
- Direct-to-consumer pricing via TrumpRx (Section III): Provide covered access to TrumpRx as part of its standard offering, but only if and when legislative or regulatory changes exclude direct-to-consumer purchases from Medicaid Drug Rebate Program and 340B rebate calculations. That regulatory exceptions for direct-to-patient sales already exist for Best Price, AMP, and ASP was not addressed in the consent decree. Payments through TrumpRx will count toward deductibles and out-of-pocket maximums.
- Insulin-specific requirements (Section IV): If a plan sponsor adopts a formulary that includes an insulin covered by the Patient Assurance Program, ESI will give all members buying that insulin full access to the program unless the plan sponsor opts out in writing. The program will ensure members’ out-of-pocket costs for participating insulin products are lower than what they would pay under the plan.
- Plan sponsor offering-compensation and rebates (Section V): By January 1, 2028, ESI must provide a standard offering to all plan sponsors that will pass applicable rebates/discounts to members at the point of sale (no extra fee beyond actual pre-funding cost, if any), avoid guarantees to plan sponsors of predetermined compensation amounts from manufacturers, and avoid spread pricing.
- Delink fees paid by manufacturers from list price (Section VI): Any compensation received from manufacturers tied to the Standard Offering to Plan Sponsors (including admin, data, or other fees) cannot be based directly or indirectly on a drug’s list price or any related benchmark.
- Transparency for plan sponsors (Section VII): No later than January 1, 2028, increase transparency for plan sponsors, including through an annual report with each drug’s costs and claim-level data, whatever data is needed for plan sponsors to comply with federal Transparency in Coverage rules (and any updates), and full disclosure of any compensation ESI pays or facilitates to consultants/brokers tied to ESI’s services.
- Retail community pharmacy offering (Section VIII): No later than January 1, 2028, transition its standard offering to retail community pharmacies to a more transparent model based on the actual acquisition cost for a drug product plus a dispensing fee and additional compensation for non-dispensing services, and not exclude any retail community pharmacy that accepts the Standard Offering terms.
- Rebate GPO reshoring and transparency (Section X): By July 1, 2028, ESI’s GPO, Ascent, will move its rebate negotiating/contracting activities, employees, functions, and assets from Switzerland to the United States.
- Independent Monitor (Section XII): ESI will appoint a Monitor to observe and report on compliance. The monitor will begin serving as soon as feasible and serve for a period of 3 years.
- Cooperation with FTC litigation (Section XVI): In FTC’s case against the remaining two PBMs and their GPOs, ESI will cooperate by authenticating documents, and making witnesses available for trial.
Implications for Pharmaceutical Manufacturers
Through the consent decree, ESI agrees to modify its behavior in exactly the ways the FTC set out to change behavior in the industry when it filed its case. Some of these changes were already part of the PBM reform legislation that was enacted the same day as the settlement. Together, these changes could have sweeping impacts across the drug distribution chain, impacting not only PBMs, but also pharmacies, drug manufacturers, health care providers, and patients. Drug manufacturer relationships with PBMs and the formularies they maintain will be changed in ways that are difficult to predict. The Commission likely timed this announcement to coincide with the launch of TrumpRx, which on its own is a big change for the industry, and raises important questions about the impact of direct-to-patient sales on manufacturer liabilities and payor coverage.
Two remedial measures agreed to by ESI could particularly impact pharmaceutical manufacturers: (1) ESI’s commitment not to discriminate between high and low list price versions of the same drug (Section I), and (2) delinking administrative fees paid by manufacturers from the list price (Section VI).
As to the first measure, it is unclear how ESI and the other PBMs will negotiate rebates for high and low list price drugs going forward. There has been private and State AG litigation against both PBMs and drug manufacturers relating to similar issues surrounding rebates, administrative fees, and PBMs’ coverage decisions for high and low list price versions of the same drug. See, e.g., In re Insulin Pricing Litig., 23-md-03080 (D.N.J. filed Aug. 4, 2023); Vermont v. Evernorth Health, 24-cv-01103 (D. Vt. filed Oct. 16, 2024); Camargo v. AbbVie, No. 23-cv-02589 (N.D. Ill. filed Apr. 25, 2023). Thus far, none of these cases have resulted in liability for drug manufacturers, and some of the claims have been dismissed.
As to the second measure, delinking administrative fees from list prices could lead to significant changes in how PBMs generate revenue. PBMs are likely to come up with creative and aggressive new ways to extract revenues from drug manufacturers through alternative vehicles for calculating fees that will no longer be dependent on list price. Whatever the vehicle, drugmakers will want to ensure that new fee structures are capable of being analyzed under the bona fide service fee test for exclusion from Best Price and Average Sales Price. These remedial measures in the settlement are likely to foster changes in the industry that will invite scrutiny from not only the FTC, but also the private plaintiffs’ bar. Manufacturers and other market participants should be aware of the antitrust risks that may arise from the PBMs’ future pricing tactics. At the very least, paying rebates (and potentially “fees”) to ensure coverage for high cost drugs will continue to require careful review by antitrust and pricing counsel.