The Federal Trade Commission (FTC) on Tuesday settled with CVS Health Corp. (NYSE:CVS) subsidiary Caremark, requiring the pharmacy benefit manager to overhaul key business practices aimed at lowering prescription drug costs, expanding transparency, and improving access to pharmacy services.
The agency estimates the agreement could generate up to $8.5 billion in consumer savings over the next decade, with an additional $4.5 billion in savings through point-of-sale rebates.
FTC Closes Long-Running Case Against Caremark
The settlement resolves all outstanding FTC litigation and investigations involving CVS Health’s pharmacy benefits management and affiliated pharmacy businesses, including matters related to rebate practices, pharmacy network contracting, and vertical integration.
The FTC’s lawsuit alleged that Caremark, along with Cigna Inc.’s (NYSE:CI) Express Scripts and UnitedHealth Group Inc.’s (NYSE:UNH) Optum, relied on rebate-driven practices that artificially increased insulin list prices.
According to the agency, drug manufacturers competed for formulary placement by offering larger rebates rather than lower net prices, enabling PBMs to retain higher rebates and fees while increasing out-of-pocket costs for patients whose copays and coinsurance were tied to list prices.
The FTC previously settled similar allegations with Express Scripts in February 2026.
The case against Optum has since been withdrawn from adjudication while the agency considers a proposed consent agreement.
Settlement Requires Changes To Rebate And Pricing Practices
Under the proposed consent order, Caremark must stop disadvantaging lower wholesale acquisition cost versions of drugs on its standard formularies.
The PBM also must offer plan sponsors options that pass manufacturer rebates directly to members at the point of sale.
The agreement further requires Caremark to provide alternatives to rebate guarantees and spread pricing, to separate manufacturer fees from drug list prices, to increase transparency, and to include specific contractual terms for retail community pharmacies.
In addition, Caremark must maintain insulin affordability programs that cap patients’ out-of-pocket costs when adopted by plan sponsors, unless those sponsors opt out in writing.
Pharmacy Access Provisions Included
The settlement also addresses the FTC’s concerns over pharmacy hub service providers that assist patients with prior authorizations, financial assistance, medication delivery, and refill reminders.
Under the agreement, Caremark cannot unfairly restrict pharmacies from working with these providers. An independent monitor will oversee complaints and review actions involving pharmacies that use hub services.
CVS Price Action: CVS Health shares were down 1.77% at $104.30 during premarket trading on Wednesday. The stock is approaching its 52-week high of $106.93, according to Benzinga Pro data.
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