After nearly two years of litigation, the FTC has reached proposed settlements with all three of the country’s largest pharmacy benefit managers and dismissed their lawsuit against the PBMs. Express Scripts, CVS Caremark, and Optum Rx each agreed to terms resolving the agency’s allegations of anticompetitive insulin pricing practices and reforms to drug pricing, rebate structures, and formulary practices. While several key details remain uncertain, the settlements may offer important insights for plan sponsors evaluating their pharmacy benefit strategies for 2027 and 2028.
Key Background
The FTC filed its original lawsuit in September 2024, alleging that all three PBMs used anticompetitive rebating practices that artificially inflated insulin list prices and limited patient access to lower-cost alternatives. As of June 2026, all three PBMs have now reached settlements with the FTC:
Express Scripts (ESI): ESI was the first PBM to settle with the FTC, announced on February 4, 2026. The agreement requires sweeping changes to ESI formulary strategy, rebate structures, pricing practices, and reporting. ESI must implement core requirements as soon as possible but no later than January 1, 2028. More details on the key elements of this settlement can be found here.
CVS Caremark: CVS Caremark became the second PBM to reach a formal settlement with the FTC on March 23, 2026. According to the FTC, the agreement could generate up to $8.5 billion in consumer savings over the next decade. The settlement generally aligns with that reached with ESI in February, with core requirements required to be implemented by January 1, 2028.
Optum Rx: The FTC announced a proposed settlement with Optum Rx on June 12, 2026. The specific settlement terms have not been publicly released yet, but directors of the FTC’s bureaus of competition and consumer protection approved the proposed consent agreement, and the FTC expects to confirm terms soon.
Settlement Terms
ESI and CVS both have published settlement terms, while Optum’s details have not yet been publicly released. The ESI and CVS agreements generally align, which may offer an early indication of what Optum’s terms could include.
- Formulary changes – The standard drug formulary for ESI and CVS can no longer prefer high-list-price drugs when lower-cost alternatives exist. Clients can choose to move to a low-WAC (wholesale acquisition cost) formulary, though the settlements do not require it. This creates a real decision point: lower upfront costs with fewer rebates or staying with a traditional high-rebate model.
- Point-of-sale rebates – For the low-WAC formulary, ESI and CVS must base member out-of-pocket costs on net price after rebates and apply those rebates at the point of sale. Plan rebate income may decrease, and high-deductible health plan members on brand drugs could see the most significant impact.
- Compensation restrictions – ESI and CVS can no longer receive compensation tied to drug list prices, eliminating a long-standing incentive that favored higher-cost products. Plan sponsors should, however, expect PBMs to explore alternative revenue streams, including new administrative or service fees, to offset the financial impact of this change.
- Reporting obligations – ESI and CVS must provide drug-level reporting, including pricing detail, rebate data, intermediary payments, and broker compensation. While these disclosures represent a significant step towards greater transparency, reporting alone does not verify that PBM contract terms are being honored or that PBMs are pricing claims accurately. Having an independent third party conduct ongoing, claim-by-claim monitoring can help ensure PBM accountability, validate reporting accuracy, and confirm that greater transparency translates into measurable outcomes.
- GPO and pharmacy changes – ESI must relocate its group purchasing organization, Ascent Health Services, to the U.S., bringing an estimated $750 billion in purchasing activity under domestic oversight. CVS’ GPO (Zinc Health Services) is already located in the US and will be required to remain so under the settlement. In addition, retail pharmacies will move to a cost-plus reimbursement model, which may shift network participation and expand member access.
What These Settlements Mean for Plan Sponsors
Anticipate new fee structures. As PBMs lose revenue tied to list prices, contract language that does not clearly define all forms of compensation will create financial and contractual risk for plan sponsors. Audit rights that once focused on rebates need to expand to cover administrative fees and other emerging revenue categories. Plan sponsors and their pharmacy partners should review contract language to make sure contract terms are aligned with plan objectives and member needs.
The formulary choice is consequential. For ESI and CVS clients, the decision between a low-WAC formulary and a traditional rebate model carries real implications for benefit design and plan budgeting. Plan sponsors should begin assessing these options now to ensure they are prepared for the January 1, 2028 implementation deadline. Truveris is working with clients to evaluate these scenarios early, including clinical considerations that may affect member access, utilization, and overall plan performance. Independent market checks and contract analysis can help plan sponsors compare the financial and member-impact tradeoffs of these models before renewal decisions are finalized.
Optum’s terms are still pending. Plan sponsors with Optum Rx should not assume their contracts will be subject to the same requirements as those outlined in the ESI and CVS settlements. Until the FTC officially publishes terms, the scope of required adjustments remains unconfirmed.
The FTC settlements represent a meaningful shift toward greater PBM accountability. While plan sponsors will gain access to more detailed data and the settlements begin to address some of the structural incentives that made PBM pricing difficult to interpret, transparency alone does not guarantee accuracy. Plan sponsors still need ongoing oversight to confirm that reported data matches billed claims and that PBMs honor contract guarantees as they adapt their models.
