FTC & CVS Caremark Reach Proposed Settlement Over Insulin Pricing

The Federal Trade Commission (FTC) and CVS Caremark have reached a proposed settlement addressing allegations that the pharmacy benefit manager (PBM) artificially inflated the price of insulin, a vital medication for people with diabetes, and hindered access to it. The agreement, filed with the agency on March 23, 2026, is subject to review and approval by the FTC chair, with final terms expected in the coming weeks.

The Broader Insulin Pricing Investigation

This proposed settlement follows a similar agreement reached last month with Cigna’s Express Scripts, also accused of anticompetitive practices related to insulin pricing. The FTC initially filed a complaint in September 2024 against CVS Caremark, Express Scripts, and UnitedHealth’s OptumRx, alleging that these major PBMs and their affiliated group purchasing organizations (GPOs) engaged in practices that drove up the list price of insulin through questionable rebate structures. These rebates, intended to lower costs, were instead allegedly used to inflate the price of the drug, benefiting the PBMs whereas burdening patients.

Pharmacy benefit managers act as intermediaries between drug manufacturers, insurance plans, and pharmacies. They negotiate drug prices and create formularies – lists of covered drugs – for health plans. The FTC’s concern centers on how these negotiations and rebate systems impact the final cost of prescription drugs, particularly insulin, which is essential for managing diabetes and can be life-threatening if inaccessible.

Understanding Pharmacy Benefit Manager Rebates

Rebates are a common practice in the pharmaceutical industry. Drug manufacturers offer rebates to PBMs in exchange for favorable placement on formularies, meaning the drug is more likely to be covered by insurance plans. However, the FTC argues that the current rebate system incentivizes PBMs to favor drugs with higher list prices and larger rebates, even if cheaper alternatives are available. This can lead to higher out-of-pocket costs for patients, especially those with high-deductible health plans.

The FTC’s case against these PBMs alleges that they prioritized maximizing their own revenue through these rebates rather than securing the lowest possible prices for patients. The agency contends that this practice artificially inflated the cost of insulin, making it less affordable for millions of Americans living with diabetes. The Reuters report highlights the significance of this settlement, noting CVS Health’s statement that the agreement is still under review.

Impact on Patients and the Healthcare System

The proposed settlement with Express Scripts, finalized in February 2026, is projected to lower patients’ out-of-pocket costs for drugs like insulin by up to $7 billion over 10 years. It’s also expected to generate millions of dollars in new revenue for community pharmacies. The FTC anticipates that the CVS Caremark settlement will yield similar benefits.

Diabetes affects a significant portion of the U.S. Population. According to the Centers for Disease Control and Prevention (CDC), approximately 37.3 million Americans, or 11.3% of the population, have diabetes. Many of these individuals rely on insulin to manage their condition. The high cost of insulin has been a major concern for patients, leading to stories of people rationing their medication or foregoing it altogether, with potentially devastating consequences.

What the Settlements Require

The settlement with Express Scripts requires fundamental changes to the company’s business practices, including increased transparency in its rebate negotiations and a commitment to pass on more of the rebates to patients. The details of the proposed CVS Caremark settlement are still pending, but are expected to include similar provisions. These changes aim to create a more competitive market for insulin and lower costs for patients.

The Ongoing FTC Investigation

The FTC’s investigation into PBM practices is ongoing. The agency is still pursuing its case against OptumRx, the PBM affiliated with UnitedHealth Group. The FTC’s actions signal a broader effort to scrutinize the role of PBMs in the healthcare system and address concerns about their impact on drug prices and patient access. The agency is seeking to increase transparency and accountability within the pharmaceutical supply chain, ultimately aiming to lower healthcare costs for all Americans.

The FTC’s pursuit of these settlements represents a significant step towards addressing the rising cost of prescription drugs and ensuring that essential medications like insulin are affordable and accessible to those who need them. The finalization of the CVS Caremark settlement, and the outcome of the case against OptumRx, will further shape the future of PBM regulation and the pharmaceutical market.