The Federal Trade Commission has reached secured a major settlement with Express Scripts, Inc. (ESI), Cigna’s pharmacy benefit manager (PBM).¹

Per the settlement, ESI is required to implement significant changes to its business practices aimed at improving transparency, lowering patients’ out-of-pocket (OOP) costs for medications such as insulin by as much as $7 billion over the next decade, generating millions of dollars in additional annual revenue for community pharmacies, and supporting the Trump Administration’s core healthcare priorities.

What led to the FTC’s enforcement action against Express Scripts and other PBMs?

As FirstWord Pharma notes,² the FTC-ESI saga dates back to 2024, when, under the Biden administration, the FTC filed a lawsuit against them, CVS Caremark, and OptumRx (owned by UnitedHealth), also known as the “Big 3” PBMs. The suit alleges that they artificially inflated insulin prices by using “anticompetitive and unfair rebating practices.”¹

A year later, the FTC released a staff report saying that these PBMs hiked up the prices of various specialty generic drugs that were dispensed at their affiliated pharmacies by as much as thousands of percent, resulting in them (and their affiliated pharmacies) making more than $7.3 billion in excess revenue when measured alongside the national average drug acquisition cost, or NADAC.

“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,” noted FTC Chairman Andrew N. Ferguson in a press release. “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.”

How did rebate and formulary practices affect insulin list prices and patient OOP costs?

In other words, the suit claims that these aforementioned PBMs designed a system that increased drugs’ list prices by favoring rebates. This system reportedly pressed insulin manufacturers to vie for preferred formulary coverage based on the size of rebates off of the list price instead of net price, which helped the PBMs, as they kept a slice of those inflated rebates. Consequently, patients were then faced with higher OOP payments—including copays and coinsurance—being that these fees are directly related to list price.

What business practice changes must Express Scripts make under the FTC consent order?

ESI—per the FTC’s proposed consent order—has settled on:

1. Formulary and pricing reforms: ESI will stop favoring high list-price drugs over lower-cost equivalents and will base member OOP costs on net prices instead of inflated list prices, while delinking manufacturer payments to ESI from list prices.
2. Expanded and standardized plan offerings: ESI will provide plan sponsors with standard options that include access to TrumpRx (subject to legal/regulatory changes), broader insulin coverage through its Patient Assurance Program, and the ability to move away from rebate guarantees and spread pricing models.
3. Greater transparency and reporting: ESI will increase transparency for plan sponsors through required drug-level reporting and data to support Transparency in Coverage compliance, and disclosure of any payments made to brokers who represent said sponsors.
4. Pharmacy model and operational changes: ESI will shift retail community pharmacy reimbursement to a more transparent acquisition-cost-plus model, actively promote its new standard offerings, and reshore its group purchasing organization, Ascent, to the United States.

“Our priority is simple: lowering drug costs for Americans. This settlement enables us to keep moving forward, and we appreciate the Administration’s reinforcement of our commitment to pharmacy benefits that put Americans first,” Express Script said in a statement.³ “As enforced by the settlement, our new, transparent pharmacy benefits model ensures our members get their medicines at the lowest price—whether it’s the Express Scripts negotiated cost, their copay, or a cash discount price.”

How do recent PBM Reform laws align with the FTC settlement?

In the same vein, the House of Representatives earlier this week voted in favor of a spending bill that features PBM reforms that are also aimed target greater price transparency for consumers, along with a reduction in OOP pharmacy costs.⁴ It was then signed into law by President Trump.

Similar to what the FTC’s enforcement action requested, the bill contains amendments to the Consolidated Appropriations Act of 2026 that would delink PBM payment from Medicare Part D list prices and rebates.

References

1. FTC Secures Landmark Settlement with Express Scripts to Lower Drug Costs for American Patients. United States Federal Trade Commission. February 4, 2026. Accessed February 5, 2026. https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-secures-landmark-settlement-express-scripts-lower-drug-costs-american-patients

2. Eaton ES. FTC Reaches Settlement with Express Scripts to Reform Rebate Practices, Transparency. FirstWord Pharma. February 4, 2026. Accessed February 5, 2026. https://firstwordpharma.com/story/7093573

3. Express Scripts Statement on Comprehensive FTC Settlement. Evernorth Health Services. February 4, 2026. Accessed February 5, 2026. https://www.evernorth.com/article/express-scripts-statement-comprehensive-ftc-settlement

4. McCrear S. PBM Reforms Signed Into Law, Reshaping Medicare Part D Drug Pricing Transparency. AJMC. February 4, 2026. Accessed February 5, 2026. https://www.ajmc.com/view/pbm-reforms-signed-into-law-reshaping-medicare-part-d-drug-pricing-transparency