Executive Summary 

• The Federal Trade Commission (FTC) recently announced a sweeping consent agreement, which settles the agency’s 2024 administrative complaint in response to alleged price inflation of insulin by Express Scripts, Evernorth Health, Medco Health Services, and Ascent Health Services. 
• The consent agreement covers a wide range of remedies that Express Scripts et al. must implement, including a restructuring of their proprietary formulary, pass through of net pricing to employer plans, improved business transparency, and – in a surprising inclusion – a commitment to counting member payments made through TrumpRx toward plan deductibles. 
• While legally permissible, the overarching construct of this settlement creates several concerning ripple effects in what is a highly regulated market and does nothing to alleviate underlying cost and price issues in health care. 

Introduction 

On February 4, 2026, the Federal Trade Commission (FTC) announced a proposed consent agreement with Express Scripts that the agency characterized as a “landmark” resolution in its insulin-focused pharmacy benefit manager (PBM) case. In 2024, the FTC filed an administrative complaint against the three largest PBMs – CVS Caremark, Express Scripts (owned by Cigna), and Optum Rx (owned by UnitedHealth Group) – and affiliated rebate/group purchasing organization (GPO) entities. The FTC alleged that the respondents’ rebating and formulary strategies artificially inflated insulin list prices, impaired access to lower list price insulin, and shifted the burden of high list prices onto patients, framing the conduct as unlawful under the FTC Act. Previous American Action Forum work has detailed the 2024 complaint. 

This proposed resolution is sweeping, and far beyond what was anticipated from the initial complaint. The FTC projects consumer savings of up to $7 billion over 10 years for the settlement, which imposes a set of “standard offering” requirements intended to curb list-price-linked incentives and reduce patient out-of-pocket exposure. The settlement was released for public comment and is accompanied by a proposed decision and order that sets out the operational commitments and compliance structure.  

The consent order – though only pertaining to a portion of the initial administrative complaint as published – is not a narrow, “stop the challenged conduct” action. It is closer to a policy document that outlines a standardized operating model, implemented through antitrust/consumer-protection enforcement rather than through statute or legitimate regulatory action. This creates several concerning ripple effects across the health care market and does not address root causes of cost or price concerns. 

Details of the Consent Order 

An FTC consent agreement is a negotiated settlement of an enforcement matter in which the respondent agrees to resolve the allegations by consenting to entry of a final administrative order, typically without admitting liability, and often waiving rights to further review. If the FTC accepts the proposed agreement, it places the order on the public record for a defined public comment period before deciding whether to make it final. Once final, the order functions as a binding set of “cease-and-desist” and affirmative compliance obligations; violating a final order can expose the respondent to civil penalties and court-enforced injunctive or other equitable relief. The consent agreement that settles the FTC insulin action covers many remedies, including some that have nothing to do with the original allegation. It creates a set of mandatory “Standard Offerings” and constraints that apply across commercial plan sponsors and community pharmacies, plus monitoring and reporting requirements. Key provisions include: 

1. A prohibition on “high list price wins” when a lower-list-price equivalent exists: Express Scripts may not run a “standard formulary” that covers a higher-wholesale acquisition cost (WAC) product while omitting a lower-WAC version of the same drug, placing it on a worse tier, or adding extra utilization controls (e.g., prior authorization/step therapy), subject to conditions (net cost parity and supply sufficiency).
2. Patient cost-sharing tethered to “net unit cost,” not list price: The order requires that by the implementation date, member out-of-pocket costs for each covered drug be no higher than the drug’s “Net Unit Cost” (list price minus rebates), and it forbids using list price (or any benchmark above net) as the cost-sharing basis – even for high-deductible plans.
3. A mandated shift toward point-of-sale rebate pass through, and away from rebate guarantees and spread pricing: By no later than January 1, 2028, parties’ “Standard Offering” must:
   • enable members to receive the benefit of rebates/discounts at the point of sale (with limited cost-prefund recovery);
   • stop providing plan sponsors a guaranteed predetermined manufacturer-compensation amount (including rebates); and
   • stop “spread pricing.”
4. A cost-plus reimbursement architecture for “Retail Community Pharmacies”: Also by January 1, 2028, parties must compensate “Retail Community Pharmacies” based on their actual acquisition cost plus a dispensing fee, with additional payments for defined non-dispensing services. They may not exclude a qualifying community pharmacy willing to accept the standard terms.
5. Transparency and compliance scaffolding: The order requires enhanced plan-sponsor reporting, including data intended to help plan sponsors comply with the federal “Transparency in Coverage” rules and disclosure of certain compensation flows (including broker/consultant compensation).
6. A compelled marketing spend and non-disparagement obligations: By the implementation date, Express Scripts et al. must spend at least $10 million per year marketing the “Standard Offerings” (for five years post-implementation), must “clearly and conspicuously” disclose their availability in promotional materials, and must not disparage the standard offerings.
7. “Reshoring” rebate-GPO functions and adding safe-harbor style transparency expectations: The order identifies Ascent Health Services as operating from Switzerland and requires that rebate negotiating/contracting activities be moved to the United States by July 1, 2028. It imposes GPO safe-harbor reporting/disclosure expectations on PBM-owned/controlled rebate GPOs.
8. Duration, monitoring, and compliance reporting: A monitor must serve for 3 years after the implementation date (with discretion for the Chairman to end the monitor requirement early), and the order remains in effect for 10 years following the implementation date (defined as the earlier of certification of full implementation or January 1, 2027).

Notably, this settlement resolves only Express Scripts’ portion of the FTC’s broader PBM litigation. The case continues against CVS Caremark and OptumRx (UnitedHealth Group’s PBM). 

Assessing FTC’s Authority to Reach and Enforce Settlements 

The FTC’s legal posture here is grounded in its enforcement framework under the Federal Trade Commission Act rather than any health-related program statute. The FTC initiated an administrative enforcement matter alleging violations of Section 5 and then resolved select parties’ portion of that matter through a negotiated consent agreement that, if finalized, will become a binding FTC order. In this posture, the operative source of authority is not a general power to regulate PBMs, but the agency’s power to investigate and prosecute alleged “unfair methods of competition” (and, where implicated, unfair or deceptive acts or practices) and to secure prospective injunctive relief designed to prevent recurrence of the challenged conduct. 

A settlement reached in this way is typically characterized as voluntary in the legal sense: The respondent avoids adjudication by agreeing to specified conduct restrictions and compliance obligations, usually without admitting liability. Once the FTC accepts the agreement it is published for public comment, after which the FTC may make the order final. Thus, new obligations that might otherwise be contested – both the assumption of particular points as fact or the potential scope of remedies – become enforceable as a matter of order compliance rather than on the merits of the original case, with the public comment process serving as the principal procedural check rather than a true litigious trial. 

If finalized, enforcement turns on the FTC’s order-enforcement mechanism. The FTC may pursue civil penalties for violations of final orders and seek injunctive and other equitable relief in federal courts to compel compliance. Thus, the legal risk for Express Scripts is not confined to whether the FTC would ultimately prevail on the underlying Section 5 theory; it includes the separate and more immediate risk of sanctions for any failure to comply with the order’s operational requirements, reporting obligations, or timelines. In practice, this “order compliance” framework can supply the government meaningful leverage to implement detailed remedies even where the underlying theory would otherwise be contested through a longer adjudicatory process. 

At the same time, it is important to distinguish legal permissibility from institutional fit. The FTC’s authority to settle and impose forward-looking conduct requirements has been established. The more contestable question – and one that often draws scrutiny in complex, highly regulated markets – is whether a consent order that prescribes a comprehensive set of operational rules begins to resemble sectoral regulation by another name. That concern is not necessarily that the FTC lacks the legal mechanism to impose such terms in a settlement, but that the breadth and specificity of the relief may functionally set policy for a market segment without the tools typically associated with sectoral regulators (e.g., rate/benefit supervision, ongoing program administration, or iterative rulemaking calibrated to market feedback). 

Potential for Competitive Disadvantages Due to Consent Agreement 

A proposed consent order of this scope can create a near-term competitive disadvantage for the parties precisely because it imposes firm-specific constraints while parallel enforcement actions against other PBMs remains unresolved. If finalized, the order would require Express Scripts et al. to make available – and affirmatively market – a defined “Standard Offering,” while limiting or phasing out several contracting approaches that remain available to competitors until they are subject to comparable relief (by settlement or judgment).  

Those constraints are not merely disclosure-oriented, but affect the economics and mechanics of PBM offerings, including requirements that patient cost-sharing not exceed “net unit cost,” and that by January 1, 2028, the new standard offering by Express Scripts et al. enables a point-of-sale rebate benefit (meaning the customer sees the rebate, if any, at the cash register) while prohibiting non-consumer-given rebate guarantees and spread pricing. The resultant asymmetry can be impactful: Rivals can continue to bid with current rebate-guarantee models and list-price-linked benefit structures that some plan sponsors prefer for premium or budget reasons, while Express Scripts et al. must bear the transition costs, compliance overhead, and potential margin compression associated with implementing the order’s new baseline. The proposed order also includes detailed compliance architecture as well as provisions that can drive incremental costs independent of benefit redesign, including a required marketing spend and operational commitments that affect related entities (such as the relocation of GPO functions to the United States by July 1, 2028). In addition, the order’s litigation-cooperation requirements – while common in concept – can impose practical burdens in an ongoing, contested matter by diverting internal resources and accelerating evidentiary development in proceedings against remaining respondents. Until comparable obligations apply to other market participants, Express Scripts and the other named parties may face a period in which they compete under a more prescriptive regime than their largest rivals while the broader case continues, even as PBM contracting cycles can lock in multi-year relationships during that interim. 

Policy Convergence and Conflict Between the CAA 2026 and the FTC Consent Agreement 

The Consolidated Appropriations Act, 2026 (CAA 2026) signed on February 3, 2026, included a longtime congressional effort to set rules for PBM accountability, principally by (1) reframing what PBMs are “supposed” to be paid for, and (2) forcing information symmetry between PBMs and plan sponsors. In broad policy terms, the statute treats PBM revenue that is implicitly tied to drug price levels as suspect, and it uses federal program contracting rules (in Part D) and Employee Retirement Income Security Act (ERISA) “reasonableness” standards (in the commercial market) to push compensation toward service-fee economics and away from price-linked economics.  

In Medicare Part D, the CAA 2026 takes a relatively direct stance: starting with plan years on or after January 1, 2028, a Part D sponsor’s PBM contracting is conditioned on the PBM (and affiliates) effectively not earning drug-utilization revenue other than bona fide service fees – and the provision is framed as “delinking” PBM compensation from drug price. That policy choice is less about micromanaging the mechanics of any particular benefit design and more about redefining the PBM’s role in Part D: The PBM is to be paid for administrative services, while price concessions are treated as value that should flow back to the plan sponsor (and then, through sponsor decisions and CMS rules, to beneficiaries).  

In the commercial/group market, the CAA 2026 is even more explicitly plan-centric. The statute pairs robust reporting obligations with a “full rebate pass-through” approach that makes PBM arrangements harder to justify unless rebates and other remuneration tied to utilization are remitted to the plan/issuer, backstopped by ERISA’s prohibited-transaction architecture. The policy implication is that Congress is not choosing “point-of-sale (POS) pass-through” as the universal answer; it is choosing sponsor ownership and sponsor accountability: The plan gets the economic value and then decides whether to deploy it via premiums, richer benefits, or POS cost-sharing.  

That’s where the CAA framework both aligns with, and diverges from, the proposed FTC consent order. They align because both are built on the same skepticism: that list-price–anchored incentives and opaque remuneration can distort formulary decisions and shift costs onto patients. But the consent order is materially more prescriptive in outcome and more consumer-facing in its default design. The FTC’s proposed order does not just require transparency or sponsor-level pass-through concepts; it operationalizes a specific theory of how the market should behave – e.g., requiring a “standard offering” in which member cost-sharing cannot exceed “net” and pushing benefit mechanics toward point-of-sale alignment – while imposing that regime on one firm ahead of full market harmonization.  

Policy-wise, that difference matters. The CAA approach is Congress saying: “Here is the floor; here is who owns the dollars; here is the reporting needed for oversight; and implementation runs through established program and ERISA channels.” The consent order approach is: “Here is a firm-specific operating model we are willing to bind now, with detailed definitions and timelines, as a remedial substitute for litigating the case to completion.” Even if the two approaches point in similar directions, the statute tends to produce uniformity and predictability, while the consent-order model risks asymmetry and competitive distortion during the period when other PBMs are not yet subject to comparable constraints (and before statutory provisions fully take effect). 

Future Policymaking Impacts of Consent Orders in Benefit Design 

Using a consent order to impose a detailed operating framework can produce durable effects that extend beyond the named respondent, even where the order is formally firm-specific. A prominent practical effect is standard-setting: Once a comprehensive “standard offering” model is imposed on a major PBM, plan sponsors, manufacturers, pharmacies, and competitors will often treat the settlement as a de facto baseline – whether because it becomes commercially salient (e.g., demanded by customers), because it serves as an enforcement template in future matters, or because counterparties price and negotiate in anticipation of similar constraints being extended to other market participants. The market can therefore converge around a settlement’s definitions and mechanics, not through legislation or generally applicable regulation, but through a combination of commercial pressure and litigation risk management. 

A consent order may also affect the allocation of costs within health insurance markets, without durable mechanisms to change them if it creates higher costs. Requirements that push value to the point of sale or that constrain how patient cost-sharing is calculated may lower out-of-pocket exposure for some members at the pharmacy counter, but the financing of the overall benefit does not disappear; it shifts. Plan sponsors may respond by rebalancing premiums, narrowing formularies, increasing utilization management, or adjusting other benefit levers to maintain actuarial targets. In other words, the settlement may change who pays, when, and through which mechanism – often yielding distributional consequences that are difficult to evaluate ex ante and that are typically addressed more transparently in legislative or regulatory processes. 

Detailed consent orders necessarily rely on defined terms, classification rules, and compliance timelines. In a market as contract-intensive as pharmacy benefits, those definitions can become fault lines – particularly where product substitution, list/net price dynamics, supply constraints, or rebate structures evolve. Parties may litigate at the margins over whether a given arrangement fits within or outside the order’s definitions, and counterparties may demand additional documentation or contractual protections to manage the risk that a compliance interpretation later changes. The result can be higher transaction costs and greater contractual rigidity, even when the underlying policy intent is simplification or transparency. 

Finally, governance risk is not merely theoretical. Consent orders are a form of policymaking that is path-dependent and, in many respects, administration-sensitive. Enforcement priorities can shift with FTC composition, and what is treated as a preferred remedy in one period can be treated as overreach in another. When the remedial terms resemble a regulatory code – rather than a narrow prohibition of discrete conduct – changes in enforcement posture can create instability for market participants who restructured their offerings to comply. This dynamic can also encourage “settlement shopping” behavior: Firms may either resist settlement to avoid becoming the market’s test case or, conversely, seek settlement to lock in a framework that advantages their existing capabilities relative to rivals.