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The Federal Trade Commission announced on Wednesday that it has reached a settlement with pharmacy benefit manager Express Scripts that is expected to drive down patients' out-of-pocket costs for drugs such as insulin by up to $7 billion over 10 years.

The settlement resolves a lawsuit alleging that Express Scripts and affiliated entities, referred to collectively as ESI, had artificially inflated the list price of insulin drugs by using anticompetitive and unfair rebating practices. It also said the PBM impaired patients' access to lower list price products, ultimately shifting the cost of high insulin list prices to vulnerable patients.

"The FTC's settlement with Express Scripts is a clear testament to the Trump-Vance FTC's focus on lowering health care costs for American patients," FTC Chair Andrew N. Ferguson said. "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 health care 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 alleged that Express Scripts, along with Caremark Rx and OptumRx, created a system that artificially drove up the list prices of drugs by preferencing rebates. The complaint alleged that this system pushed insulin manufacturers, among others, to compete for preferred formulary coverage based on the size of rebates off the list price rather than net price.

Under terms of the settlement, Express Scripts has agreed to:

  • Stop preferring on its standard formularies high wholesale acquisition cost versions of a drug over identical low wholesale acquisition cost versions.
  • Provide a standard offering to its plan sponsors that ensures that members' out-of-pocket expenses will be based on the drug's net cost rather than its artificially inflated list price.
  • Provide covered access to TrumpRx as part of its standard offering upon relevant legal and regulatory changes.
  • Provide full access to its Patient Assurance Program's insulin benefits to all members when a plan sponsor adopts a formulary that includes an insulin product covered by the program, unless the plan sponsor opts out in writing.
  • Provide a standard offering that allows the plan sponsor to transition off rebate guarantees and spread pricing.
  • Delink drug manufacturers' compensation from list prices as part of its standard offering.
  • Increase transparency for plan sponsors, including with mandatory, drug-level reporting, providing data to permit compliance.
  • Transition its standard offering to retail community pharmacies to a more transparent and fairer model.
  • Promote the standard offerings to plan sponsors and retail community pharmacies.
  • Reshore its group purchasing organization Ascent from Switzerland to the United States.

The public will have 30 days to submit comments on the proposed consent agreement package.

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