FTC Settlement with Express Scripts Is a Mixed Bag, Congress Still Must Act
Washington, D.C. — In response to news that the Federal Trade Commission (FTC) and Express Scripts have agreed to a proposed settlement resolving the FTC’s lawsuit against the second-largest pharmacy benefit manager (PBM) for artificially inflating insulin prices, the American Economic Liberties Project released the following statement.
“Although this proposed settlement includes positive terms that extend beyond insulin and what Congress just enacted into law, it has its limitations,” said Emma Freer, Senior Policy Analyst for Healthcare at Economic Liberties. “Chief among them, the stock price for Express Script’s parent company, Cigna Group, barely budged in response, signaling that Wall Street does not see this announcement as meaningfully affecting profitability. So, despite FTC Chair Andrew Ferguson’s claims, there are real questions about whether this proposal will significantly lower Americans’ drug costs.”
“Ultimately, this proposal spares Express Scripts a costly trial, which would have exposed its business practices more broadly – and could have provided more lasting accountability,” she continued. “Given the scope of the original complaint and the limitations of this settlement, the FTC should continue to investigate Express Scripts’ conduct beyond insulin. Congress must also pursue additional structural reforms, including breaking up Cigna and other Big Medicine insurance conglomerates that combine PBMs and pharmacies under one roof, as well as strengthen the FTC’s 13(b) powers to seek monetary damages.”
Under the proposed 10-year consent order, Express Scripts has agreed to the following terms:
| Terms | Benefits | Limitations and questions |
|---|---|---|
| Stop favoring higher list-price drugs over identical lower-cost alternatives on its standard formulary | Expands coverage of lower-cost alternatives; applies to all drugs, not just insulins, which were the focus of the lawsuit; applies to commercial market | Doesn’t apply to all formularies, many of which are customized by plan sponsors |
| Extend $25 monthly out-of-pocket insulin cost cap to all plan members when a sponsor adopts a formulary that includes an eligible insulin product | Lowers members’ insulin costs | Doesn’t apply to all insulins; allows sponsors to opt out |
| Provide and promote a standard offering that bases members’ out-of-pocket costs on net drug prices rather than list prices; transitions away from rebates and spread pricing; requires disclosure of certain information to sponsors; fairly reimburses retail community pharmacies; and doesn’t exclude willing retail community pharmacies from its network | Requires Express Scripts to pass through savings to plan members at the point of sale; bolsters small, independent pharmacies (with three or fewer retail stores) by ensuring they are reimbursed in line with their costs and not excluded from networks, both of which are essential to their financial viability; applies to commercial market, not just Medicare Part D prescription drug plans | Duplicates some of the provisions recently enacted by Congress, with which Express Scripts will have to comply irrespective of this settlement; excludes non-standard offerings and medium- to large pharmacy chains, which are also harmed by Express Scripts; raises questions about whether pharmacy reimbursement requirements would be sufficient and enforceable |
| Include direct-to-consumer pricing through TrumpRx as a covered benefit* | Needlessly loops in TrumpRx, a constellation of secret, unenforceable one-off deals between the administration and Big Pharma that circumvent meaningful PBM reform and stand to enrich Donald Trump Jr. | |
| Reshore Express Scripts’ middleman, Ascent, from Switzerland to the United States | Relocates rather than eliminates this PBM group purchasing organization (GPO), which reportedly only has 88 jobs and exists solely to gouge Americans |
* Beyond this settlement, direct-to-consumer pricing through TrumpRx is only available to cash-pay patients who are either uninsured or choosing not to use their insurance benefits. Such purchases also don’t count toward insured patients’ deductible or out-of-pocket maximum.
The FTC’s September 2024 administrative complaint alleges that the “Big Three” PBMs – CVS Caremark, Express Scripts, and UnitedHealth Group’s OptumRx – and their affiliated PBM GPOs engaged in “anticompetitive and unfair rebating practices” that drove up insulin list prices, blocked access to more affordable generic alternatives, and shifted costs to vulnerable patients who need insulin to survive.
For most of the time since its 1921 discovery, insulin was cheap. For instance, the average list price for Humalog, a widely-used insulin, was $21 in 1999, according to the complaint. However, starting in 2012, the Big Three – which account for nearly 80% of U.S. prescription drug claims – leveraged their market power during price negotiations with drug manufacturers, demanding ever-increasing rebates in exchange for preferred formulary placement and excluding competing products, such as cheaper generic equivalents.
As a result of these rebating practices, insulin prices soared. For example, one brand-name drug – Novo Nordisk’s Novolog U-100 – more than doubled in price, from $122.59 in 2012 to $289.36 in 2018. PBMs pocketed these rebates instead of passing them along to patients, as they claimed to do. Consequently, vulnerable patients paid more – or could not afford – to access life-saving medications.
The Big Three also harm small, independent pharmacies across the U.S., as a July 2024 FTC staff report revealed. By imposing unfair, opaque contract terms and steering patients toward their own affiliated pharmacies, PBMs make it difficult for these unaffiliated pharmacies to stay in business and serve their communities. Between January 2024 and February 2025, at least 3,179 U.S. pharmacies – more than 5% – closed their doors for good, according to Economic Liberties research.
The bipartisan, bicameral Patients Before Monopolies Act (S.5503, H.R. 10362) – introduced by Sens. Elizabeth Warren (D-MA) and Josh Hawley and Reps. Diana Harshbarger (R-TN-1) and Jake Auchincloss (D-MA-4) in December 2024 – would force health insurers and PBMs, including Express Scripts, to divest their pharmacy businesses within three years given the conflicts of interest inherent to their common ownership.
Learn more about Economic Liberties’ Break Up Big Medicine initiative to address healthcare consolidation here.
Learn more about Economic Liberties here.
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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; international trade arrangements that promote balanced trade and benefit workers, farmers and small businesses; and wealth is broadly distributed to support equitable political power.