A Second PBM Settlement, but the Same Unanswered Question for Community Pharmacies
On July 14, 2026, the Federal Trade Commission (FTC) announced a settlement with Caremark Rx, LLC and Zinc Health Services, LLC (together, “Caremark”), resolving the agency’s 2024 antitrust lawsuit accusing Caremark, alongside Express Scripts, Inc. (ESI) and OptumRx, of artificially inflating insulin list prices through anticompetitive and unfair rebating practices that prioritized higher rebates and impeded access to lower-list-price drugs.[1] For independent and community pharmacies, employer and union health plans, pharmacy services administrative organizations (PSAOs), and wholesalers, the Caremark settlement is the second domino to fall after the FTC’s February 2026 settlement with ESI, raising many of the same opportunities and unanswered questions.[2]
The Settlement at a Glance
The FTC states that the proposed consent order locks in up to $8.5 billion in consumer savings over ten years, with up to an additional $4.5 billion in potential savings for patients through point-of-sale rebates.[1] Structurally, the Caremark settlement mirrors the ESI settlement in several respects. Caremark must:
- Stop disadvantaging low wholesale acquisition cost (WAC) drug versions on its standard formularies;
- Offer plan sponsors a standard option that provides point-of-sale rebates so that members’ out-of-pocket costs can be based on a drug’s net cost rather than its inflated list price;
- Let plan sponsors transition off rebate guarantees and spread pricing;
- Delink manufacturer fees paid to the PBM and its group purchasing organization (GPO) from drug list prices;
- Increase transparency reporting to plan sponsors; and
- Include “certain terms” in its standard offering to retail community pharmacies.[1]
The order also bars Caremark from interfering with pharmacies’ ability to work with pharmacy hub service providers, which are digital platforms that may coordinate benefits investigations, prior authorizations, patient financial assistance, and other services. The order also establishes a monitor to receive complaints and review actions taken against pharmacies using hub pharmacy services. The FTC tied this provision directly to concerns raised in the House Judiciary Committee’s January 2026 interim staff report on CVS’s market conduct.[1]
Retail and Community Pharmacies: Cost-Plus Opportunity, but No Fee Floor
The headline provision for retail community pharmacies is the opportunity to shift to a cost-plus reimbursement model, consistent with the direction the FTC set in the ESI settlement, under which ESI agreed to transition its standard offering to a model based on actual acquisition cost plus a dispensing fee and additional compensation for non-dispensing services.[2] That shift, if implemented as intended, could meaningfully improve reimbursement predictability for pharmacies squeezed by spread pricing and below-cost maximum allowable cost (MAC) rates.
But pharmacies should read the fine print carefully. Just as the ESI settlement never specified a minimum dispensing fee or a floor for non-dispensing service compensation, the Caremark order likewise stops at requiring “certain terms” in the standard offering without setting any dollar figure, formula, or methodology that Caremark must use to calculate dispensing fees or other pharmacy compensation.[1][2] In practice, this means Caremark, like ESI before it, retains significant discretion over how the cost-plus reimbursement model will translate into pharmacy compensation on a per-claim basis. Pharmacies that assume the settlement guarantees an adequate dispensing fee may be disappointed once Caremark’s actual contract terms are made available. The hub pharmacy protections are a meaningful development for pharmacies, but they do not substitute for specific minimum reimbursement or dispensing-fee requirements.
PSAOs and Wholesalers: Watch the GPO and Delinking Provisions
For PSAOs negotiating on behalf of independent pharmacy networks, the delinking of manufacturer GPO fees from drug list prices is worth close attention, as it may affect how rebate and fee dollars flow through the supply chain and whether those changes are reflected in network contract terms passed down to member pharmacies. Caremark is also required to maintain its GPO activities in the United States, a provision that wholesalers and distributors should track given how GPO purchasing volume and formulary placement decisions influence acquisition cost and off-invoice discount structures throughout the pharmaceutical supply chain.[1]
How Frier Levitt Can Help
Frier Levitt has repeatedly drafted and submitted public comments to the FTC and other regulators on behalf of pharmacies, PSAOs, employer plans, and wholesalers. We understand both the antitrust implications of these settlements and the day-to-day contracting realities they are meant to address. Looking ahead, federal law requires CMS, by April 1, 2027, to issue a request for information seeking stakeholder input as it develops standards for “reasonable and relevant” contract terms and conditions between Medicare Part D plans and network pharmacies. Frier Levitt is preparing to assist pharmacies and other stakeholders in evaluating these developments and advocating for workable contracting standards.
Contact Frier Levitt to discuss the Caremark settlement, evaluate opportunities for future regulatory advocacy, or review your current PBM contracts in light of these developments.
[1] Federal Trade Commission, “FTC Secures Major Settlement with Caremark, Resolving Antitrust Case Against Second Drug Middleman,” ftc.gov, July 14, 2026, https://www.ftc.gov/news-events/news/press-releases/2026/07/ftc-secures-major-settlement-caremark-resolving-antitrust-case-against-second-drug-middleman.
[2] Federal Trade Commission, “FTC Secures Landmark Settlement with Express Scripts to Lower Drug Costs for American Patients,” ftc.gov, February 4, 2026, https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-secures-landmark-settlement-express-scripts-lower-drug-costs-american-patients.
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