On February 4, 2026, the Federal Trade Commission (FTC) announced a settlement and consent order in a long-running administrative action against pharmacy benefit managers (PBMs) Express Scripts, OptumRx, and Caremark Rx. The FTC alleged that these three PBMs, which have a collective U.S. market share of approximately 80 percent, deployed anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs by systematically preferring higher-priced drugs at the exclusion of lower cost products. The settlement resolves the claims as to Express Scripts and its family of companies.
The Express Scripts settlement confirms our observations in the Life Sciences and Healthcare 2026 Antitrust Year in Preview that signs pointed to the possibility that the Trump administration may have been seeking to reach negotiated settlements in this litigation. On its face, the Express Scripts settlement is poised to dramatically alter the landscape for drug pricing, purchasing, reimbursement, and dispensing. Among other things, Express Scripts must replace the opaque rebate-driven formulary construction that had allowed for wholesale exclusion of lower-cost products with a transparent, cost-based approach to pricing and access. The settlement terms are likely to inform the resolution of claims against the remaining respondent PBMs, OptumRx and Caremark Rx, and suggest how antitrust enforcement may interact with Trump Administration policy more broadly.
Background
PBMs are central actors in pharmaceutical transactions, influencing drug pricing, rebates, and sales through the creation of drug formularies, which is ostensibly the list of drugs available under a given insurance plan. Formularies often contain several “tiers,” and inclusion on certain tiers is determinative of availability and price for prescription drugs. As the FTC alleged, “If a PBM excludes a drug from its formulary, the manufacturer risks losing a significant portion of sales among patients covered by that formulary. Conversely, if a PBM preferences or prefers a drug by placing it on a more favorable tier compared to competing products, it can boost the drug’s sales volume and market share.” The result is a perverse system in which higher-priced drugs are able to pay for exclusion of less costly drugs, even when therapeutically identical, in what the FTC deemed a “chase the rebate strategy.”
The FTC’s complaint, filed in 2024 under the Biden administration, alleged that the PBMs and their affiliated group purchasing organizations (GPOs) distorted competition to inflate the price of insulin drugs by pushing manufacturers to compete for formulary coverage based on the size of rebates off the list price rather than the net price. This pricing allegedly benefitted the PBMs, which kept a portion of the inflated rebates, and hurt patients, who ultimately had to shoulder inflated list prices because copays and coinsurance are tied to the list price of drugs.
The Settlement
On February 4, 2026, the FTC announced what it described as a “landmark” settlement with Express Scripts.1 The FTC press release provided the following bullets to describe its effects. Under the settlement, Express Scripts must:
- 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;2
- 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 U.S., which will bring back to the U.S. more than $750 billion in purchasing activity over the duration of the order.
The FTC’s case against Caremark Rx and OptumRx remains ongoing, but the settlement with Express Scripts provides both pressure and a likely model for resolution of those claims as well. With or without similar requirements on the remaining major PBMs, the terms of this settlement constitute a major reshaping of the prescription drug industry. FTC Chairman Andrew Ferguson emphasized that the settlement reaches well beyond the specific conduct alleged to have violated Section 5, stating that: “It also delivers significant wins for the broader Trump-Vance healthcare agenda, including reshoring major portions of ESI’s business, ensuring regulatory compliance with price transparency laws, requiring disclosures of kickbacks to brokers, and paving the way for Americans to participate fully in TrumpRx.”
Firms involved in the prescription drug industry should engage closely with antitrust counsel to develop response plans that clearly delineate between the competition-related aspects of the settlement and those arising from administration healthcare policy. Given the industrywide ramifications of the settlement terms, experienced antitrust counsel is also necessary to help mitigate risks of a perceived coordinated response. Finally, this settlement has implications for the scope of settlement negotiations in antitrust matters more broadly, confirming the Trump administration’s willingness to use the process to advance broader policy interests.
[1] Interestingly, the vote to approve was 1-0. FTC Commissioner Mark Meador was recused from the matter. FTC Chairman Andrew Ferguson had previously recused himself but reversed the recusal in April 2025 so that the case could proceed.
[2] TrumpRx, which was anticipated to launch in January 2026, has been delayed. It is unclear when the U.S. Department of Health and Human Services’s direct-to-consumer drug platform will go live, https://trumprx.gov/.
