On February 4, 2026, the Federal Trade Commission announced a landmark settlement with Express Scripts (ESI) requiring wide‑ranging reforms to the PBM’s pricing, rebate, and formulary practices. The proposed agreement is subject to a 30‑day public comment period, after which the FTC may finalize the order. If finalized, the required changes would take effect no later than January 1, 2027.
The FTC settlement resolves allegations that ESI inflated insulin list prices through anticompetitive and unfair rebating practices, which the FTC says limited access to lower‑priced products and shifted higher list‑price costs onto vulnerable patients whose cost‑sharing is tied to list price.
The broader FTC case also includes CVS Caremark and OptumRx, which have not reached settlements. Those actions remain ongoing.
What the Settlement Requires
The agreement mandates several major operational and formulary changes for Express Scripts:
- Changes to formulary practices
ESI’s standard formulary may no longer prefer high list‑price (high‑WAC) drugs when lower‑priced (low-WAC) alternatives exist.
Employers may still choose among different pricing models, but the default formulary structure covered by the settlement prohibits preferencing higher‑priced products when equivalent, lower‑priced options are available.
- Member out‑of‑pocket costs based on net price
Under the standard low‑WAC formulary option, member out‑of‑pocket (OOP) costs must be based on net price rather than list price. Rebates must be applied at the point of sale (POS), which may impact a plan sponsor’s rebate income and premium strategy.
- TrumpRx DTC purchases must count toward deductibles and OOP maximums
The settlement requires ESI’s standard plan design to ensure that direct-to-consumer (DTC) transactions count toward members’ deductibles and out‑of‑pocket maximums, once regulatory mechanics are finalized.
This is a major shift from how pharmacy benefits traditionally operate and plan sponsors will need to account for new purchasing behaviors that could affect utilization trends.
- PBM compensation delinked from list prices
ESI can not receive compensation tied to drug list prices, a shift intended to remove potential incentives connected to higher list‑price products.
- Expanded reporting and disclosures
The PBM must provide drug‑level reporting, including details on:
- Pricing
- Rebates
- Intermediary payments
- Broker compensation
These reporting obligations increase visibility for plan sponsors into how pricing and payments flow through the benefit.
- Group Purchasing Organization (GPO) reshoring: Ascent Health Services moved to the U.S.
The settlement requires ESI to move its GPO, Ascent Health Services, from Switzerland to the United States, bringing an estimated $750 billion in purchasing activity under U.S. oversight during the order’s duration.
This shift is intended to increase transparency into manufacturer fees and payment structures.
- Cost‑plus reimbursement for retail pharmacies
ESI must move retail community pharmacy reimbursement to a cost‑plus model, which the FTC states will increase equity and help support local pharmacy viability.
Key Takeaways
The FTC’s settlement with Express Scripts introduces several significant requirements, including: elimination of high list-price formulary preference, POS rebate application with net price–based OOP, inclusion of TrumpRx/DTC pricing in accumulators, delinking PBM compensation from list prices, expanded reporting, reshoring of Ascent, and cost-plus pharmacy reimbursement. These changes are expected to take effect by 2027 pending finalization, and additional details will emerge as the FTC completes its comment and approval process.
While the settlement is not yet finalized, employers may want to monitor:
- Final settlement language after the FTC’s 30‑day comment period
- Additional FTC actions involving CVS Caremark and OptumRx, which could broaden similar requirements across the PBM market
- How the finalized settlement may impact affiliates of the PBMs involved in the lawsuit
As these developments move toward implementation, Truveris will continue helping plan sponsors understand potential impacts across the pharmacy benefit, whether in formulary structures, reporting requirements, pricing arrangements, or emerging DTC channels. Through claims-level monitoring and procurement support, Truveris can provide the visibility and pharmacy support for plans to make educated decisions about contract terms in an evolving industry.
Frequently Asked Questions
- What did the FTC announce regarding Express Scripts?
The FTC reached a proposed settlement with Express Scripts requiring major changes to PBM formulary practices, rebate handling, reporting, GPO operations, and pharmacy reimbursement. The settlement addresses allegations that ESI inflated insulin list prices and limited access to lower‑priced alternatives.
- When would these changes take effect?
Following a 30‑day public comment period starting on February 4th, 2026, the FTC may finalize the order. Required reforms are expected to be implemented no later than January 1, 2027.
- What is changing about formularies?
ESI’s standard formulary will no longer be able to prefer higher‑priced drugs over lower‑priced equivalents, restricting a practice the FTC says contributed to inflated list prices. Traditional rebate-based models will still be available.
- How will member cost‑sharing work under the settlement?
Members’ out‑of‑pocket costs must be based on net price, with rebates applied at the point of sale for the standard low‑WAC formulary model.
- Are TrumpRx DTC purchases included in deductibles and OOP maximums?
Historically, no; however, under the settlement’s standard structure, TrumpRx DTC purchases for plans and members under contract with ESI must count toward deductibles and OOP maximums, once regulatory conditions are met.
- What new reporting should plan sponsors expect?
ESI must provide drug‑level reporting covering pricing, rebates, intermediary payments, and broker compensation.
- Are other PBMs involved?
The FTC’s broader case includes CVS Caremark and OptumRx, which have not reached settlements. Those actions remain pending. This may also serve as a template for future FTC actions against additional PBMs, including those that may be affiliated with the PBMs in the lawsuit.
Truveris is a pharmacy cost containment company dedicated to reducing pharmacy costs and driving transparency for employers and benefit consultants. Our proprietary, data-driven technology and deep industry expertise empower smarter pharmacy benefit decisions through contract optimization and PBM oversight. Independent and unbiased, Truveris delivers measurable savings and accountability across every pharmacy program.
