Friends,
The FTC just issued a binding consent order against Express Scripts and its parent, Cigna. This is not guidance, not a press release, and not optional. It is a 10-year federal mandate that fundamentally changes how pharmacy benefits must be designed, priced, and disclosed.
Here is the plain-English version of what just happened.
First, Express Scripts can no longer favor high list price drugs over lower list price versions of the same medication just to chase rebates. If a lower-priced version exists and costs the plan the same or less, it must be covered at least as favorably. No worse tiers. No extra hurdles.
Second, members can no longer be charged more out of pocket than the actual net cost of the drug. That means no more list-price-based coinsurance games. This applies to all plan types, including high deductible health plans, and it explicitly applies to Cigna fully insured plans.
Third, Express Scripts is required to give plan sponsors access to programs that lower member costs, including insulin affordability programs and point-of-sale cost reductions. Employers can opt out, but only if they do so in writing after acknowledging they are declining a more consumer-friendly option. That paper trail matters.
Fourth, insulin gets special protection. If insulin is covered under their affordability program, every member must have access unless the employer opts out in writing. Member insulin costs must be lower than what the standard plan design would otherwise require.
Fifth, this order blows up the traditional PBM money model. Express Scripts must eliminate spread pricing, stop guaranteeing rebate dollars, and pass rebates and discounts to members at the point of sale. Manufacturer compensation can no longer be tied to inflated list prices.
Sixth, transparency is no longer optional. Express Scripts must provide drug-level and claim-level reporting, support federal transparency rules, and fully disclose any compensation paid to brokers or consultants.
Seventh, independent pharmacies must be paid based on actual acquisition cost plus a dispensing fee, and paid separately for clinical services. No more exclusionary tactics disguised as network design.
Eighth, Express Scripts is required to actively promote this compliant “standard offering” and spend at least $10 million a year marketing it. They cannot bury it, disparage it, or quietly steer employers away from it.
There is also federal monitoring, mandatory reporting, and enforcement behind all of this.
Why this matters.
This order establishes a new baseline for what fair, reasonable, and fiduciary-aligned pharmacy benefits look like. If an employer is offered a Cigna or Express Scripts plan that still relies on list prices, rebate guarantees, spread pricing, or opaque compensation, the obvious question becomes why they are being sold something worse than what the FTC now requires as a standard option.
That is not just a pricing issue anymore. That is a fiduciary issue.
This is one of the most consequential PBM developments in years, and it will change plan design conversations, whether people realize it yet or not.
Justin
Source: Download Source Court Documents Here