The Federal Trade Commission (FTC) recently reached a settlement with Express Scripts, Inc. (ESI) and its rebate aggregator, Ascent Health Services, LLC (Ascent), to resolve the FTC’s enforcement action relating to alleged formulary abuses and unfair rebate practices involving insulin.[1] Although the investigation focused on insulin, the settlement broadly addresses drug pricing practices and includes provisions that directly affect plan sponsors.
The FTC Settlement and What It Requires
The settlement includes reforms designed to increase transparency and reduce reliance on rebate-driven pricing models, including:
- Non-discrimination of low-wholesale acquisition cost (WAC) versions of a drug;
- A standard offering to plan sponsors that: (i) provides covered access to TrumpRx; (ii) ensures that members’ out-of-pocket expenses are based on the drug’s net cost, rather than its artificially inflated list price; and (iii) allows the plan sponsor to transition away from rebate guarantees and spread pricing; and
- Relocating Ascent from Switzerland to the United States to increase transparency into rebate operations.
For years, Frier Levitt has warned that major PBM practices in the pharmacy benefit space could create significant legal exposure, for both the PBMs and plan sponsors, and has advised employers that they need to actively oversee pharmacy benefit design and audit their PBMs. (See, e.g., prior article analyzing the CAA anti-gag prohibition, J&J ERISA Suit, JPMorgan ERISA Suit, and LabCorp ERISA Suit ).
Will Other PBMs Follow?
Importantly, the FTC also filed enforcement actions against CVS Caremark (and its rebate aggregator Zinc Health Services, LLC (Zinc)) and OptumRx (and its rebate aggregator Emisar Pharma Services, LLC (Emisar)). On February 9, 2026, those PBMs and their affiliates, together with the FTC, jointly sought an extension of the stay of the administrative proceeding to continue “parallel settlement discussions” and “determine whether there is an opportunity to resolve this proceeding.”[2] The Secretary granted the extension until March 3, 2026.[3] In practical terms, the case has been paused to allow further settlement negotiations.
It would not be surprising if other PBMs follow and reach settlements that follow the same ESI framework, including standard offerings that permit access to TrumpRx, expand lower-cost formulary alternatives, and eliminate rebate guarantees and spread pricing. Indeed, OptumRx can similarly relocate Emisar to the United States. After all, a recent report by Hunterbrook Media found that Emisar had no employees working in its Ireland office location.[4]
Fiduciary Implications for Plan Sponsors
The key takeaway is that the PBMs are engaging with the FTC and agreeing to implement structural reforms aimed at promoting transparency. However, these settlements are unlikely to serve as a complete remedy. Plan sponsors should anticipate that PBMs may raise administrative fees, dispensing fees, or other compensation structures to offset revenue previously generated through spread pricing and rebate retention.
The settlement is particularly notable because PBMs countersued the FTC alleging that the FTC’s suit and allegations were unconstitutional.[5] The PBM post-remedial measures appear to be a tacit admission that PBMs profited from plans by retaining rebates, pocketing reimbursement spread, preferring high-cost drugs over lower-cost substitutes for rebates, and requiring patients to use PBM-owned specialty pharmacies as opposed to other marketplace options such as Mark Cuban Cost Plus or TrumpRx.
How Frier Levitt Can Help
Plan sponsors should take proactive steps. The information emerging from these enforcement actions should prompt plan fiduciaries to reassess PBM contracts and historical practices to determine whether plan assets were adversely affected. Plan sponsors have a fiduciary duty to monitor PBMs and other service providers, and act in the best interest of plan participants, including by pursuing recovery of potential plan losses where appropriate. Contact Frier Levitt to evaluate your PBM arrangements and assess potential exposure, compliance obligations, and recovery options.
[1] https://www.ftc.gov/news-events/news/press-releases/2026/02/ftc-secures-landmark-settlement-express-scripts-lower-drug-costs-american-patients.
[2] https://www.ftc.gov/system/files/ftc_gov/pdf/614860.2026.02.09_joint_expedited_motion_to_extend_stay_proposed_order.pdf.
[3] https://www.ftc.gov/system/files/ftc_gov/pdf/d9437_2026.02.11_commission_order_extending_stay_.pdf.
[4] https://hntrbrk.com/pbmgpo/. The report also found that even after multiple visits there was no activity at the ghost headquarters of Zinc in Minnesota.
[5] https://www.documentcloud.org/documents/25355117-express_scripts_et_al_ftc_complaint/.
Senior Associate
