FTC Reaches Settlement With CVS Caremark to Curb Insulin Rebate Practices, Cut Patient Costs

The Federal Trade Commission (FTC) has settled a lawsuit with CVS Health's Caremark over allegations that the pharmacy benefit manager (PBM) artificially inflated insulin prices and impeded patient access to the drug, with the agency projecting up to $8.5 billion in patient savings over 10 years.¹ It's the second of the 3 largest PBMs to resolve the FTC's case, following a February 2026 settlement with Cigna's Express Scripts.²

Background on the FTC's PBM Case

The FTC first sued Caremark, Express Scripts, and UnitedHealth's Optum Rx in September 2024, accusing the "Big Three" PBMs of building a rebate system that rewarded higher insulin list prices at patients' expense.³ The 3 companies collectively control roughly 80% of prescriptions filled in the US. PBMs negotiate drug prices with manufacturers, reimburse pharmacies, and determine which medications are covered and at what cost to patients. They have long been described as the "middlemen" standing between patients and lower drug prices.

Insulin pricing has been especially contentious: a JAMA study found that 1 in 5 US adults with diabetes under age 65 reported rationing insulin because of cost. Commercially insured patients have also been excluded from the $35 out-of-pocket insulin caps established for Medicare beneficiaries under the Inflation Reduction Act.

Express Scripts Settled First

Express Scripts became the first of the 3 PBMs to resolve the litigation, agreeing in February 2026 to a deal built around 4 goals: increasing transparency, cutting patient out-of-pocket costs by up to $7 billion over 10 years, growing revenue for community pharmacies, and advancing the administration's health care priorities.² Express Scripts avoided a fine and was not required to admit wrongdoing, despite the FTC calling the agreement a landmark settlement mandating fundamental changes to rebate practices that had favored the PBM through list-price-driven formulary placement. The company also agreed to reshore its group purchasing organization, Ascent, from Switzerland, a move the FTC projected could return more than $750 billion in purchasing activity to the US.

What the Caremark Settlement Requires

The Caremark deal follows a similar structure. The FTC alleged Caremark, Express Scripts, and Optum Rx created a "perverse" rebate system that favored higher-priced insulin in order to "line their pockets" at patients' expense.¹ Under the settlement, Caremark must avoid disadvantaging low-list-price insulin products on its standard formularies and must offer plan sponsors a standard option that passes rebates through to members at the point of sale. The agency also estimated the deal will unlock up to $4.5 billion in further savings through pharmacy counter rebates.

Caremark must further allow plan sponsors to move away from rebate guarantees and spread pricing and must keep its group purchasing subsidiary, Zinc Health Services, based in the US. FTC Chair Andrew Ferguson said the settlement delivers real savings on prescription drug prices while barring Caremark from interfering with hub pharmacies that help patients identify their lowest-cost option.⁴

Optum Rx remains the only one of the 3 originally named PBMs still facing active FTC litigation.¹

References

1. Silverman E. FTC settles lawsuit with CVS Caremark over charges it manipulated insulin prices, impeded access. STAT. July 14, 2026. Accessed July 15, 2026. https://www.statnews.com/pharmalot/2026/07/14/ftc-settles-lawsuit-cvs-caremark-insulin-prices-access/
2. Express Scripts avoids fines but agrees to major structural overhaul. AJMC^®. February 5, 2026. Accessed July 15, 2026. https://www.ajmc.com/view/express-scripts-avoids-fines-but-agrees-to-major-structural-overhaul
3. Jeremias S. FTC takes legal action against 3 largest PBMs over insulin costs. AJMC. September 20, 2024. Accessed July 15, 2026. https://www.ajmc.com/view/ftc-takes-legal-action-against-3-largest-pbms-over-insulin-costs
4. FTC secures major settlement with Caremark, resolving antitrust case against second drug middleman. News release. FTC. July 14, 2026. Accessed July 15, 2026. https://www.ftc.gov/news-events/news/press-releases/2026/07/ftc-secures-major-settlement-caremark-resolving-antitrust-case-against-second-drug-middleman