Feb 4 - Cigna Corp’s Express Scripts has agreed to settle claims by the U.S. Federal Trade Commission that its insulin pricing practices ran afoul of antitrust and consumer protection statutes, according to a copy of the settlement reviewed for this report. The pact obliges Express Scripts to implement a suite of changes aimed at reducing costs for patients, health plans and smaller community pharmacies.
The settlement aligns with recent federal efforts to tackle high drug prices, efforts that have included securing agreements with drugmakers to lower costs. Under the terms of the deal, the FTC will be able to scale back a broader enforcement action that was brought by the former Biden administration and that named Cigna’s Express Scripts, UnitedHealth Group Inc’s Optum unit and CVS Health Corp’s CVS Caremark as defendants. The litigation against Optum and Caremark remains active.
Pharmacy benefit managers - the intermediaries that structure how drugs are covered by health insurers - have been under regulatory and legislative scrutiny for roughly a decade over their pricing and contracting practices. While firms in the industry have introduced voluntary reforms in recent years, the settlement grants the FTC explicit authority to require more sweeping changes of Express Scripts.
Key elements of the 10-year consent order limit practices critics contend drive up drug costs. Among these restrictions are prohibitions on retaining certain rebate payments from drug manufacturers when those rebates are calculated off the list price of medications. The FTC has estimated the agreement could yield patient savings of as much as $7 billion across a 10-year span, according to a senior agency official.
Although Express Scripts announced a move away from rebate-centered revenue models last year, the settlement legally binds the company to those changes and places it under a three-year monitorship to oversee compliance. The FTC has previously accused leading pharmacy benefit managers of steering insurers and patients toward higher-priced medicines over lower-cost alternatives to maximize their own returns. In 2024 the agency sued Express Scripts, Optum and CVS Caremark, alleging they unfairly excluded lower-cost insulin products from insurer coverage lists.
The settlement contains several operational commitments by Express Scripts. The company must develop processes to work more closely with local pharmacies, and it is required to provide annual disclosures of drug costs to employer clients. As part of the agreement, Express Scripts also consented to relocate Ascent Health Services - its Switzerland-based rebate aggregation unit - to the United States.
Most of Cigna’s insurance operations center on administering employer and group health plans that pay for medical services. The settlement also addresses purchases made through a planned White House program called TrumpRX; Cigna must count any direct-to-consumer drug purchases made via that platform toward copays and deductibles in the standard employer plan it offers.
In recent years, Express Scripts, CVS, UnitedHealth and Cigna have rolled out new pricing approaches intended to make discounts, fees and true drug costs more transparent. Company statements increasingly emphasize that a larger share of revenue now derives from administrative fees rather than from opaque reimbursements from drug manufacturers.
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