By Jody Godoy
Feb 4 (Reuters) – Cigna Corp’s Express Scripts settled the U.S. Federal Trade Commission’s claims its insulin pricing practices violated antitrust and consumer protection laws, and agreed to changes aimed at lowering costs for patients, insurers and small pharmacies, the agency said on Wednesday.
The Trump administration has taken aim at high drug costs and secured agreements with pharmaceutical companies to slash prices. The settlement, first reported by Reuters, fits with that goal, and allows the FTC to pare down a case brought by the former Biden administration against Cigna’s Express Scripts, UnitedHealth Group Inc’s Optum unit and CVS Health Corp’s CVS Caremark. The case against Optum and Caremark is ongoing.
Pharmacy benefit managers, which set how drugs are covered by health insurance, have faced a decade of scrutiny from regulators and lawmakers over pricing practices. While the industry has already made reforms, the settlement gives the FTC power to enforce broader changes at Express Scripts.
FTC Chair Andrew Ferguson said in a post on social media site X that the settlement will help drive drug prices down.
“For years, out-of-pocket costs for patients were driven by artificially high list prices and convoluted rebate games. That ends with this settlement,” he said.
Cigna shares briefly added to gains after the news. UnitedHealth added to losses and was trading down 3% on Wednesday morning.
Spokespeople for Cigna, UnitedHealth and CVS did not immediately respond to requests for comment.
The 10-year agreement restricts Express Scripts’ ability to engage in practices critics say contribute to high costs, like pocketing rebate payments from drugmakers based on the list price of drugs. The FTC estimates the agreement could save patients as much as $7 billion over a decade.
While Express Scripts last year announced a shift away from rebates, the settlement mandates the change. An independent monitor will oversee the company’s compliance with the deal for three years.
The FTC has accused the largest pharmacy benefit managers of steering insurers and patients to higher-priced drugs over lower-priced options to maximize profits. In 2024, the FTC sued Express Scripts, Optum and CVS Caremark accusing them of unfairly excluding lower-cost insulin products from lists of drugs covered by insurers.
Express Scripts’ settlement contains provisions requiring it to work with local pharmacies and disclose drug costs to employers annually.
Express Scripts also agreed to move Ascent Health Services, its Switzerland-based rebate aggregator, to the U.S. as part of the deal.
Most of Cigna’s insurance business is managing plans for employers and other groups that cover medical spending. The settlement requires Cigna to count any direct-to-consumer purchases of drugs through the White House’s planned TrumpRX platform against copays and deductibles in the standard plan it offers to employers.
In recent years, CVS, UnitedHealth and Cigna have all rolled out new pricing models that aim to show more of the discounts, fees and drug costs. Increasingly, the companies say their revenue is based on administrative fees rather than hidden reimbursements from drugmakers.
(Reporting by Jody Godoy in Los Angeles and Amina Niasse in New York; Editing by Mark Porter and Lisa Shumaker)
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