A “Landmark” Win or a Strategic Escape? Unpacking the FTC’s Express Scripts Deal
In February 2026, the Federal Trade Commission announced that it “secured a landmark settlement” with Express Scripts—one of the nation’s largest pharmacy benefit managers. Formalized as a consent order, the settlement represents a milestone in efforts to rein in PBMs, whose practices largely escaped regulatory scrutiny until the FTC launched an industry-wide inquiry in 2022. That inquiry eventually led to the FTC bringing an administrative action against the “Big 3” PBMs in 2024, alleging that they inflated the list price of insulin drugs through rebate and other anticompetitive and unfair practices.
On its face, the consent order reads like a regulatory sea change: an end to rebate guarantees and spread pricing, a move toward out-of-pocket expenses based on net costs rather than list prices, greater transparency and standardized offerings, and a compliance monitor to help ensure it all sticks. The consent order also aligns with the broader Trump-Vance healthcare agenda, including terms that require Express Scripts to reshore its Switzerland-based group purchasing organization and that ensure Express Scripts’ standard offerings are available through TrumpRx, which launched the day after the settlement. The FTC hailed the consent order as a major victory for consumers and a signal that the era of opaque, rebate-driven drug pricing may be near its end.
Yet a closer look reveals a more complicated picture. The day before the settlement was announced, President Trump signed into law the Consolidated Appropriations Act of 2026, which included significant PBM reforms, including rebate pass-through requirements and enhanced transparency and oversight. Industry observers were also quick to point out that Express Scripts had already begun transitioning clients to rebate-free arrangements and offering cost-plus models to independent pharmacies. At the same time, the consent order may leave notable gaps—mail-order pharmacies and patient steering to Express Scripts’ own affiliated pharmacies remain untouched, and a “Meeting Competition” clause may offer more flexibility than the headline terms suggest. Meanwhile, the FTC’s administrative action against other major PBMs remains unresolved, raising questions about whether this consent order sets the industry standard or will create a more complicated competitive and pricing landscape.
This article unpacks the FTC’s enforcement journey, the substance of the Express Scripts consent order, and what it all means for how PBMs influence drug availability and prices.
The FTC’s Growing Focus on PBMs
PBMs are intermediaries that manage prescription benefits between health insurers, drug manufacturers, and pharmacies. They design drug formularies, negotiate rebates with drug manufacturers, and reimburse pharmacies for prescriptions, which impacts drug coverage and prices.
As PBMs began to vertically integrate with health insurers and pharmacies, the FTC took notice. In June 2022, the FTC launched an investigation into “the impact of vertically integrated pharmacy benefit managers on the access and affordability of prescription drugs.”[1] At first, the FTC issued orders under Section 6(b) of the FTC Act to the largest PBMs to produce information, but the FTC later expanded the inquiry to group purchasing organizations (GPOs) affiliated with the PBMs.[2] The Section 6(b) investigation sought to examine vertically integrated PBMs and their control over multiple stages of the drug-supply chain. The inquiry focused on the effect of manufacturer rebates on formulary design and drug costs as well as the use of alleged clawbacks, steering patients to PBM-affiliated pharmacies, and administrative restrictions on coverage (e.g., prior authorizations).[3]
Shortly after announcing its investigation, the FTC issued an enforcement policy statement in June 2022 to put the PBM industry “on notice” as to when manufacturer rebates may be unlawful.[4] The statement described potentially unlawful manufacturer-PBM formulary rebate practices as a “top priority,”[5] especially when rebates and fees are paid by manufacturers to PBMs in “exchange for excluding lower-cost drug products.”[6] According to the FTC, formulary agreements that “foreclose competition from less expensive alternatives” may be unlawful restraints of trade, unlawful monopolization, or exclusive dealing.[7] The statement also asserted that formulary agreements that exclude less expensive alternatives “in a manner that shifts costs to payers and patients” may be unlawful as well.[8]
In July 2023, the FTC then withdrew an older policy statement issued in support of certain PBM practices. The FTC “caution[ed] against reliance on prior advocacy statements and studies related to pharmacy benefit managers that no longer reflect current market realities.”[9] The move was driven by the FTC’s belief that “the PBM industry has changed significantly over the last two decades with increased vertical integration and horizontal concentration; the growth of PBM rebates, list prices and DIR fees; and the expiration of prior FTC Consent Orders.”[10]
By July 2024, the FTC published a 71-page interim report finding that PBMs have become highly concentrated and vertically integrated, with the six largest PBMs collectively controlling more than 90% of all prescriptions filled in the United States.[11] The interim report concluded that this concentration gives PBMs “significant power” over the pharmaceutical supply chain, such that PBMs can limit access to potentially lower-cost drugs.[12] The interim report was issued following a 4-1 vote, with Commissioner Andrew Ferguson issuing a concurring statement and Commissioner Melissa Holyoak dissenting because “the Report was plagued by process irregularities and concerns over the substance.”[13]
On January 14, 2025, days before President Trump took office, the FTC (led by then-Chairwoman Lina Khan) published a 57-page second interim report finding that the “Big 3” PBMs “marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent,” which includes drugs used to treat cancer, HIV, and other serious diseases and conditions.[14] The Commission voted 5-0 to issue the second interim staff report, with Commissioner Ferguson issuing a concurring statement joined by Commissioner Holyoak.
The FTC’s Administrative Action Against the “Big 3” PBMs
In September 2024, the FTC brought an administrative enforcement action against the three largest PBMs—Caremark Rx, Express Scripts, and OptumRx—and their affiliated group purchasing organizations “for engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients.”[15] The FTC voted 3-0-2 to bring the action, with Democratic Commissioners voting in favor and Republican Commissioners Melissa Holyoak and Andrew Ferguson recusing themselves.[16]
The complaint alleged “that even when lower list price insulins became available that could have been more affordable for vulnerable patients, the PBMs systematically excluded them in favor of high list price, highly rebated insulin products.”[17] The “chase-the-rebate” strategy used by PBMs allegedly threatened to exclude certain drugs from formularies “to extract higher rebates from drug manufacturers in exchange for favorable formulary placement,” which is necessary “to access patients with commercial health insurance.”[18] The scheme allegedly caused drug manufacturers to increase list prices “to provide the larger rebates and fees necessary to compete for formulary access,” leading to insulin prices more than doubling in some instances.[19]
The FTC’s “Landmark” Settlement with Express Scripts
Nearly 17 months after the FTC brought its administrative action—and with no substantive rulings—the FTC announced a settlement with Express Scripts in early February 2026. The FTC characterized it as “landmark settlement with one of the nation’s largest pharmacy benefit managers,” requiring Express Scripts “to adopt fundamental changes to its business practices” that are expected to increase transparency and drive down out-of-pocket costs for patients.[20]
Without admitting any legal violation, Express Scripts agreed to several behavioral requirements, which the FTC summarized in an accompanying press release:
Stop preferring on its standard formularies high wholesale acquisition cost versions of a drug over identical low wholesale acquisition cost versions;
Provide a standard offering to its plan sponsors that ensures that members’ out-of-pocket expenses will be based on the drug’s net cost, rather than its artificially inflated list price;
Provide covered access to TrumpRx as part of its standard offering upon relevant legal and regulatory changes;
Provide full access to its Patient Assurance Program’s insulin benefits to all members when a plan sponsor adopts a formulary that includes an insulin product covered by the Patient Assurance Program unless the plan sponsor opts out in writing;
Provide a standard offering to all plan sponsors that allows the plan sponsor to transition off rebate guarantees and spread pricing;
Delink drug manufacturers’ compensation to ESI from list prices as part of its standard offering;
Increase transparency for plan sponsors, including with mandatory, drug-level reporting, providing data to permit compliance with the Transparency in Coverage regulations, and disclosing payments to brokers representing plan sponsors;
Transition its standard offering to retail community pharmacies to a more transparent and fairer model based on the actual acquisition cost for a drug product plus a dispensing fee and additional compensation for non-dispensing services;
Promote the standard offerings to plan sponsors and retail community pharmacies; and
Reshore its group purchasing organization Ascent from Switzerland to the United States, which will bring back to the United States more than $750 billion in purchasing activity over the duration of the order.[21]
The consent order remains in effect for 10 years and requires that most reforms be implemented by January 2027 and others throughout 2028. Express Scripts will also be subject to a formal monitor for three years as well as mandatory compliance reports.
The Commission voted to accept the consent order for public comment with a 1-0 vote, with Chairman Ferguson voting in favor, Commissioner Meador recusing himself, and other Commission seats remaining vacant.[22]
What Does This All Mean?
Industry Reactions. Many industry observers believe that the Express Scripts consent order will reshape the drug-pricing landscape and signals momentum toward net-drug pricing—“a market environment in which net prices, not list prices, determine access, economics, and competitive strategy.”[23] But while the consent order seeks to shift PBMs away from rebate models, industry analysts note that “Express Scripts was already transitioning clients to a rebate-free model and offers cost-plus reimbursement to independent pharmacies, blunting the impact of the settlement.”[24]
Other observers have noted that the consent order “could even help Express Scripts by preventing more drastic reform from a Congress bent on curbing healthcare costs down the line.”[25] After all, the day before the consent order was announced, President Trump signed into law the Consolidated Appropriations Act of 2026, which included significant PBM reforms, including requiring pass-through rebates to prescription drug plan (PDP) sponsors and providing for enhanced transparency and federal oversight.[26] And numerous other PBM reforms have been introduced in Congress, which generally reflect bipartisan support for addressing PBM practices and lowering drug prices.
The consent order was also announced the day before TrumpRx launched, which is a platform designed to aggregate direct-to-consumer (DTC) purchasing platforms for key prescription drugs for patients who are on Medicaid or pay cash.[27] The timing is notable given that Express Scripts agreed in the consent order to provide TrumpRx access to its standard offering of products and services.
Potential Settlement Limitations. As with almost any consent order, there are wait-and-see dynamics with how Express Scripts may interpret and implement key terms of the consent order and how closely the FTC will monitor and enforce those terms, if needed. One potentially open question involves the “Meeting Competition” clause in the consent order. Under that clause, Express Scripts may respond to a written request by “Plan Sponsors” or a “Retail Community Pharmacy” and offer different terms than its “Standard Offering,” so long as the “Standard Offering” is also made available.[28] “Standard Offering” is defined in the consent order to mean Express Scripts’ “package of products, services, features, or terms” offered to all Plan Sponsors and Retail Community Pharmacies.[29]
The consent order is also limited to Retail Community Pharmacies, which includes three or fewer retail stores and does not cover pharmacies affiliated with Express Scripts.[30] In other words, the consent order does not address mail-order pharmacies or Express Scripts’ ability to steer patients to its own pharmacies—areas of concern discussed in the FTC’s July 2024 Interim Report on PBMs.
Pending PBM Actions.Beyond the Express Scripts settlement, the FTC still needs to resolve its administrative case against OptumRx, Caremark, and their group purchasing organizations. A few days after the settlement with Express Scripts was announced, the FTC agreed to extend a stay of its case while settlement discussions with OptumRx and Caremark occur.[31] Those PBMs have denied the FTC’s substantive allegations and also challenged in federal court the FTC’s in-house administrative process as violating due process, which remains a backdrop to the settlement discussions. Given these dynamics, it remains to be seen what, if any, settlement may materialize. But if these PBMs settle on different terms, that could potentially create inconsistencies in how the “Big 3” PBMs compete and influence drug prices and coverage.
In addition, various complaints by class-action plaintiffs and state attorneys general are pending against the “Big 3” PBMs and drug manufacturers, which raise similar rebate, administrative fee, and coverage issues. While the class actions exert monetary pressure, the state attorneys general could seek additional behavioral and other remedies beyond (or in tension with) the FTC’s settlement with Express Scripts.
Final Thoughts.The Express Scripts settlement represents a significant milestone in the FTC’s ongoing effort to reform the PBM industry, but it is far from the final word. With FTC litigation against OptumRx and Caremark still pending, state attorneys general pursuing their own enforcement actions, and private class-action suits working through the courts, the regulatory and legal landscape for PBMs remains in flux.
Whether this settlement ushers in a new era of transparency and lower drug costs—or merely formalizes changes already underway—will depend on how the remaining enforcement actions unfold, how aggressively the FTC monitors compliance, and whether Congress steps in with broader legislative reform. For now, the settlement signals that the days of opaque rebate-driven PBM business models may be numbered, even as questions linger about the practical scope and long-term impact of these reforms.
If you have questions about this Client Alert or are interested in additional details or guidance, please reach out to Adam M. Acosta (adam.acosta@pierferd.com) or your regular PierFerd contact for assistance.
Copyright 2026, American Health Law Association, Washington, DC. Reprint permission granted.
This publication and/or any linked publications herein do not constitute legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, the author(s) and PierFerd assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, this publication may constitute Attorney Advertising. © 2026 Pierson Ferdinand LLP.
[1] FTC Matter No. P221200, Order to File a Special Report (June 6, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221200PBMModelOrder.pdf; FTC Launches Inquiry into Prescription Drug Middlemen Industry, Fed. Trade Comm’n (June 7, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry.
[2] FTC Further Expands Inquiry into Prescription Drug Middlemen Industry Practices, Fed. Trade Comm’n (June 8, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/06/ftc-further-expands-inquiry-prescription-drug-middlemen-industry-practices.
[3] FTC Matter No. P221200, supra note 1.
[4] Policy Statement of the FTC on Rebates and Fees in Exchange for Excluding Lower-Cost Drug Products, Fed. Trade Comm’n (June 16, 2022), https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-rebates-fees-exchange-excluding-lower-cost-drug-products.
[5] Id.
[6] Id. at 1.
[7] Id. at 5.
[8] Id.
[9] FTC Votes to Issue Statement Withdrawing Prior Pharmacy Benefit Manager Advocacy, Fed. Trade Comm’n (July 20, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/07/ftc-votes-issue-statement-withdrawing-prior-pharmacy-benefit-manager-advocacy.
[10] FTC Statement Concerning Reliance on Prior PBM-Related Advocacy Statements and Reports That No Longer Reflect Current Market Realities, Fed. Trade Comm’n (July 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/CLEANPBMStatement7182023%28OPPFinalRevisionsnoon%29.pdf.
[11] Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies Interim Staff Report at 2, Fed. Trade Comm’n (July 2024), https://www.ftc.gov/system/files/ftc_gov/pdf/pharmacy-benefit-managers-staff-report.pdf.
[12] Id. at 3-4.
[13] Dissenting Statement of Commissioner Melissa Holyoak In the Matter of the Pharmacy Benefit Managers Report at 2, Fed. Trade Comm’n (July 9, 2024), https://www.ftc.gov/legal-library/browse/cases-proceedings/public-statements/holyoak-statement-on-pharmacy-benefit-managers-report.
[14] FTC Releases Second Interim Staff Report on Prescription Drug Middlemen, Fed. Trade Comm’n (Jan. 14, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-releases-second-interim-staff-report-prescription-drug-middlemen.
[15] FTC Sues Prescription Drug Middlemen for Artificially Inflating Insulin Drug Prices, Fed. Trade Comm’n (Sept. 20, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices.
[16] Id. Chairman Ferguson reversed his recusal in April 2025 to allow the case to proceed after President Trump fired the Democratic commissioners, citing advice from ethics lawyers.
[17] Id.
[18] Id.
[19] Id.
[20] FTC Secures Landmark Settlement with Express Scripts to Lower Drug Costs for American Patients, Fed. Trade Comm’n (Feb. 4, 2026), https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-secures-landmark-settlement-express-scripts-lower-drug-costs-american-patients.
[21] Id.
[22] As noted (supra note 16), Chairman Ferguson reversed his recusal in April 2025. The FTC was left with just two commissioners after President Trump fired the two Democratic commissioners in March 2025 and with Commissioner Holyoak stepping down from the FTC in November 2025 to assume an interim U.S. Attorney role.
[23] Adam J. Fein, The FTC Blows Up Express Scripts’ PBM Model—and Launches the Net Pricing Drug Channel, Drug Channels (Feb. 4, 2026), https://www.drugchannels.net/2026/02/the-ftc-blows-up-express-scripts-pbm.html.
[24] Rebecca Pifer Parduhn, Express Scripts Reaches ‘Landmark’ Settlement with FTC in Insulin Suit, Healthcare Dive (Feb. 4, 2026),https://www.healthcaredive.com/news/express-scripts-ftc-reach-settlement-insulin-lawsuit/811369/.
[25] Id.
[26] Consolidated Appropriations Act, 2026, H.R. 7148, 119th Cong. §§ 6701-03 (2026).
[27] Luke Halpern & Aislinn Antrim, TrumpRx Launches, Offering Cash-Paying Patients Discounted Prices, Pharmacy Times (Feb. 6, 2026), https://www.pharmacytimes.com/view/trumprx-launches-offering-cash-paying-patients-discounted-drugs.
[28] Decision and Order as to Respondents Express Scripts, Inc. et al. § XI, In the Matter of Caremark Rx, LLC et al., FTC Dkt. No. 9437 (Feb. 4, 2026), https://www.ftc.gov/system/files/ftc_gov/pdf/d09437caremarkproporder-esiresps.pdf.
[29] Id. at 5, Definitions (DD), (EE).
[30] Id. at 5, Definition (AA).
[31] Matthew Perlman, FTC’s PBM Case Paused For More Deal Talks, Law360 (Feb. 12, 2026), https://www.law360.com/articles/2441176/ftc-s-pbm-case-paused-for-more-deal-talks.
