The Federal Trade Commission’s settlements with Caremark Rx and Express Scripts could reshape how pharmacy benefit managers present pricing options to plan sponsors. While the PBMs denied allegations that they inflated insulin costs, the settlement orders require new standard offerings designed to increase transparency, limit member out-of-pocket costs and give plan sponsors clearer alternatives to rebate-driven pricing.

A previous blog covered the FTC orders requiring Caremark Rx and Express Scripts to stop favoring high-list-price versions of drugs over identical low-list-price versions on their standard formularies. This post looks at the settlement terms most relevant to plan sponsors and members.

What PBMs Must Offer Plan Sponsors

CaremarkRx and Express Scripts agreed to provide a standard offering to plan sponsors that meets the following requirements.

• Limit out-of-pocket costs: Ensure member out-of-pocket costs for each covered drug are no higher than the net unit cost of each drug regardless of plan type, including high-deductible health plans. Net unit cost means the list price per unit regardless of any rebates, discounts or fees. For example, say a drug costs $10 but the plan’s copay is $20. The PBM and the plan cannot charge the member the $20 even though that’s the full copay. A member will pay $10, which is the lower of the drug cost or copay involved.
• Pass through rebates: Provide a standard offering to plan sponsors that ensures that rebates will be passed through to members at the point of sale and that members’ out-of-pocket costs are no higher than the plan sponsor’s contracted rate minus any rebates, rather than the artificially inflated list price.
• No rebate guarantees: Since PBMs must pass through all rebates, they cannot guarantee fixed rebate amounts to plan sponsors.
• No spread pricing: Spread pricing is prohibited in standard offerings. With spread pricing, PBMs retain any difference between sponsor payment and pharmacy reimbursement.
• Delink fees from list prices: Compensation received by PBMs from drug manufacturers cannot be linked to list prices.
• Access to TrumpRx: Counts member payments on TrumpRx toward member deductibles and out-of-pocket maximums, for drugs covered under the plan sponsor’s benefit design or drugs certified by TrumpRx as being the most favored nation price.
• Increase transparency: Plan sponsors will receive automatically an annual report disclosing each drug product’s costs and pharmacy claim-level reporting. The PBM will disclose any compensation it pays to brokers in connection with providing pharmacy benefit services to plan sponsors.

How PBMs Must Promote the Standard Offering

With the standard offering requirements outlined, the settlement orders also require PBMs to promote those offerings to plan sponsors. For five years after the implementation date, PBMs must spend at least $10 million annually to advertise, market and otherwise promote the standard offerings and their potential benefits to plan sponsors, as well as to retail community pharmacies. PBMs also are prohibited from disparaging the standard offering to plan sponsors.

When Plan Sponsors May See Changes

The low-WAC standard offering should be implemented by January 1, 2027. Some provisions are effective as soon as commercially feasible but no later than January 1, 2028, specifically, the provisions about rebates, the ban on spread pricing and increased transparency requirements. The orders will remain in effect for ten years.

What the Settlements Could Mean for RFPs

If OptumRx settles with the FTC on terms similar to Express Scripts and Caremark Rx, how will that affect request-for-proposals (RFPs) for plan sponsors and service providers? In a recent International Foundation webcast, “Rx Changes: New Laws and Future Impacts to Prescription Drugs,” Susan Hayes, chief executive officer of Pharmacy Investigators and Consultants, highlighted potential impacts when plan sponsors go out to bid as these requirements are implemented in 2027 and 2028.

• PBMs must offer plan sponsors a standard low-WAC/no-rebate option in all bids, including new RFPs and incumbent renewals.
• Plan sponsors will need to get familiar with the low-WAC requirements and what no-rebate pricing could look like. Expect PBMs to market the benefits of this option.
• Will employers choose the standard low-WAC/no-rebate option, or stay rebate-driven? Hayes framed this as the transparency plan sponsors have been asking for: Now that the option is available, will they keep relying on rebates or move toward low-WAC pricing?
• Consultants may also need a mindset shift. Instead of focusing mainly on whether switching PBMs saves the sponsor money, Hayes said decision makers may need to ask whether the program meets members’ needs and is tailored to the lowest net cost. That could require more clinical review of formularies and bids.

The open question is where this PBM option will fit within broader prescription drug cost management strategies.

What’s Next?

Hayes predicted that all three large PBMs will reach similar settlement terms with the FTC to avoid the risk of losing market share. We don’t yet know how many plan sponsors will choose this type of model, but Hayes said some will look for an offering with the lowest pricing for patients, full claims disclosure and no need to “chase rebates.” Related, Cigna’s CEO said Express Scripts is seeing “significant early interest” from the self-funded market for a new rebate-free, fee-based, transparent PBM model, Fierce Healthcare reported.

Resources

To learn more about other settlement terms regarding retail community pharmacies, patient assurance programs for insulin, rebate group purchasing organizations, compliance monitoring, see FTC Reaches Second Insulin Pricing Settlement: Comparing the Caremark and ESI Orders, Mintz, July 17, 2026.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.