WASHINGTON, February 4, 2026 — A landmark settlement with Express Scripts, one of the nation’s largest pharmacy benefit managers, could lower out-of-pocket drug costs for Americans by up to $7 billion over the next decade, the Federal Trade Commission announced Wednesday. The agreement resolves allegations that the company inflated the cost of insulin and other prescription drugs.
A Shift in Pharmacy Benefit Design
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The deal marks a significant step toward greater transparency and affordability in the prescription drug market.
- Express Scripts will no longer prioritize drugs with higher list prices over cheaper alternatives.
- The company will separate its compensation from the savings it negotiates with drug manufacturers.
- Increased transparency will include reporting on drug spending and disclosing payments to brokers.
- Express Scripts will move its group purchasing organization, Ascent, back to the United States.
Under the terms of the settlement, Express Scripts, owned by Cigna, will overhaul its drug benefit designs. This includes a commitment to no longer favor medications with high list prices when equally effective, lower-cost options are available. The company will also delink its compensation from the savings it secures from drugmakers, a practice critics argue incentivizes higher drug prices.
What does this mean for patients? The FTC estimates that the changes will reduce patients’ out-of-pocket costs for drugs like insulin by as much as $7 billion over ten years. The settlement also aims to boost revenue for community pharmacies by requiring Express Scripts to adopt a cost-plus reimbursement model.
Reshaping the Landscape
The FTC initially sued Express Scripts, along with Optum Rx (UnitedHealth) and CVS’ Caremark, in September 2024, alleging that their negotiating tactics with drug manufacturers led to the preference of higher-cost drugs. While the agency paused action against Express Scripts in late January to consider the proposed settlement, the lawsuit against Optum Rx and Caremark continues.
Experts predict the settlement will dramatically reshape the pharmacy benefits landscape, potentially accelerating a shift away from rebate models. These models, they say, encourage drugmakers to artificially inflate list prices and obscure true pharmaceutical spending.
However, analysts note that Express Scripts was already moving toward many of these reforms, potentially lessening the settlement’s immediate impact. The company is already transitioning clients to a rebate-free model and offering cost-plus reimbursement to independent pharmacies.
No Penalties, But a Potential Precedent
Notably, the settlement does not include any monetary penalties, and Express Scripts did not admit wrongdoing. Some analysts believe this limits the settlement’s overall effect and could even benefit the company by preventing more substantial reforms from Congress.
“We broadly view these as manageable and, importantly, not larger in scope than the changes [Cigna] was already implementing,” J.P. Morgan analyst Lisa Gill wrote in a note Wednesday. “We are less concerned that this settlement … will have a material incremental impact on Cigna’s financials.”
Transparency and Pharmacy Reform
The settlement also mandates increased transparency, requiring Express Scripts to disclose more data on drug spending and provide information to employers to comply with payer transparency requirements. This aligns with recent efforts by the Department of Labor, which late last week proposed a rule forcing PBMs to share pricing and compensation information with employers. President Donald Trump also recently signed a government funding package including similar PBM transparency reforms.
Furthermore, Express Scripts has agreed to pay community pharmacies based on the actual cost of drugs, plus a dispensing fee. Pharmacy groups have applauded this move toward a cost-plus model, citing the need for predictable reimbursement as pharmacies face financial pressures.
“The settlement obliterates the big-PBM industry fiction that they work to lower the cost of drugs for Americans. Obviously, the opposite appears to be true. I hope this is only the beginning of righting the games leading to higher drug prices and harming competition,” said B. Douglas Hoey, the CEO of the National Community Pharmacists Association, in a statement Wednesday.
Perhaps the most unexpected aspect of the agreement is the requirement for Ascent, Express Scripts’ group purchasing organization, to return to the U.S. from Switzerland. The FTC estimates this move will bring $750 billion in economic activity back to the country and subject Ascent to U.S. laws and regulations.
Express Scripts has until 2027 to comply with most of the settlement’s provisions, with a 2028 deadline for transparency requirements, the cost-plus model shift, and Ascent’s return to the U.S. The company will also be monitored for ten years under the deal.
The consent agreement was approved by one FTC Commissioner, Andrew Ferguson. Commissioner Mark Meador recused himself from the vote. The FTC currently operates with only two commissioners following recent departures and pending nominations.
