FTC Reaches Historic Settlement with Express Scripts to Reduce U.S. Drug Prices
The Federal Trade Commission (FTC) has announced a historic settlement with Express Scripts, Inc. (ESI), one of the largest pharmacy benefit managers in the U.S. This agreement requires ESI to implement transformative changes aimed at enhancing transparency in drug pricing and reducing patients’ costs significantly.
Details of the Settlement
Under the terms of the settlement, ESI is expected to lower out-of-pocket costs for diabetes medications like insulin by up to $7 billion over the next decade. This initiative is set to generate millions in new revenue for community pharmacies annually.
Background of the Legal Action
The FTC’s lawsuit alleged that ESI engaged in anti-competitive practices, artificially inflating insulin prices and hindering patient access to more affordable options. These practices disproportionately affected vulnerable patients, shifting the financial burden of high drug prices onto them.
Statements from Key Officials
FTC Chairman Andrew N. Ferguson emphasized the significance of this settlement, highlighting its alignment with the Trump Administration’s healthcare priorities. He stated, “This agreement will end the practices that have kept drug prices high and provide essential financial relief to American patients relying on ESI.”
Key Changes Mandated by the Settlement
The agreement outlines specific changes that ESI must implement, including:
- Ceasing preference for high-cost drugs over identical lower-cost alternatives.
- Offering a standard plan design ensuring out-of-pocket expenses reflect net costs.
- Maintaining a Patient Assurance Program for insulin products for all applicable plan members.
- Ending rebate guarantees and changing pricing models for plan sponsors.
- Delinking drug manufacturers’ compensation from inflated list prices.
- Enhancing transparency for plan sponsors with comprehensive drug-level reporting.
- Transitioning support for community pharmacies to a fairer compensation model.
- Reshoring its purchasing activities back to the U.S., potentially creating over $750 billion in economic activity.
Next Steps and Public Involvement
The FTC’s consent agreement will be open for public comment for 30 days following the confirmation vote, which passed 1-0, with one commissioner recused. Comments will be reviewed and posted on Regulations.gov.
Once finalized, this consent order will legally bind ESI and establish enforceable terms moving forward. The changes initiated by this landmark settlement aim to make critical healthcare more accessible for millions of Americans.
