Washington, D.C. – In response to news that the Federal Trade Commission (FTC) and CVS Caremark have agreed to a proposed settlement resolving the FTC’s lawsuit against the largest pharmacy benefit manager (PBM) for artificially inflating insulin prices, the American Economic Liberties Project released the following statement:

“While the proposed settlement addresses some of the concerns raised in the FTC’s original lawsuit, it fails to address the core problem,” said Emma Freer, Senior Fellow for Healthcare at the American Economic Liberties Project. “Caremark will remain part of CVS Health’s vertically integrated healthcare empire, which controls not just a PBM but also a major insurer, Aetna, and the largest retail pharmacy chain in the country. Those conflicts of interest allow CVS Health to steer patients to higher-cost drugs dispensed by its affiliates and squeeze out independent pharmacies while preserving the same incentives that helped create today’s broken drug pricing system.”

“This settlement is another example of antitrust enforcers in this administration choosing to settle with a Big Medicine conglomerate rather than seek lasting accountability in court,” Freer continued. “Congress must act where this settlement falls short by breaking up Big Medicine and putting patients and clinicians — not corporate middlemen — at the center of our healthcare system.”

Under the proposed 10-year consent order, Caremark would be required to adjust some of the harmful practices at the center of the FTC’s original case and increase price transparency for plan sponsors. But the settlement is also full of loopholes and spares Caremark a costly trial that may have produced structural remedies such as a breakup. 

Like the FTC’s February settlement with Express Scripts, this agreement relies heavily on voluntary offerings and monitoring rather than structural changes that prevent PBMs from continuing to profit from a broken drug pricing system. Following the Express Scripts settlement, independent pharmacies warned that new Express Scripts contract terms required independent pharmacies to share proprietary cost data  and failed to deliver the fair reimbursement they were promised. 

The FTC’s original September 2024 administrative complaint alleged 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.

As antitrust enforcers now let big healthcare conglomerates off the hook, the need for Congress to act and break up Big Medicine is all the more urgent. A good place to start: the bipartisan Break Up Big Medicine Act (S.3822). Introduced by Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO) in February 2026, it would force health insurers and PBMs, including CVS Caremark, to divest their pharmacy businesses given the conflicts of interest inherent to their common ownership, among other provisions.

BACKGROUND

For most of the period since its 1921 discovery, insulin was cheap: the average list price for Humalog, a widely-used insulin, was just $21 in 1999. 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.

Learn more about Economic Liberties’ Break Up Big Medicine initiative to address healthcare consolidation here.

Learn more about Economic Liberties here.