Two PBM Settlements, No Precedent

The Federal Trade Commission has negotiated sweeping changes with two pharmacy benefit managers that, according to the Commission, administered about 57 percent of United States prescriptions in 2023. No court has decided whether the conduct challenged in this matter violated Section 5 of the Federal Trade Commission Act. That is the interesting part.¹

In September 2024, the Commission filed an administrative complaint against the three largest pharmacy benefit managers and their affiliated group purchasing organizations. The Commission alleged that their preference for high-list-price, high-rebate insulin inflated list prices, restricted access to lower-list-price versions, and shifted costs onto vulnerable patients.² The Commission alleged only violations of Section 5, including an unfair method of competition and unfair acts or practices. It did not plead a claim under the Sherman or Clayton Acts.³

Express Scripts settled first. On February 4, 2026, the Commission announced an agreement and accepted a proposed consent order for public comment.⁴ The proposed order reads less like a conventional remedy and more like a redesign of the business. It would require Express Scripts to stop preferring corresponding high wholesale acquisition cost versions of a drug over low-cost versions, base member cost sharing on net rather than list price, delink manufacturer compensation from list price, stop spread pricing in its standard offering, and give plan sponsors an option that abandons rebate guarantees.⁵ Retail community pharmacies would receive a standard offering based on actual acquisition cost plus a dispensing fee. Express Scripts also agreed to move its group purchasing operation from Switzerland to the United States.⁶

Caremark followed on July 14, 2026, on materially parallel terms.⁷ The Commission estimates that the proposed order could produce up to $8.5 billion in consumer savings over ten years, plus up to $4.5 billion from point-of-sale rebate pass-through.⁸ The Caremark agreement added a provision that the Express Scripts order lacks. Caremark may not unfairly interfere with network pharmacies that work with pharmacy hub service providers. The provision responds to concerns detailed in a January 2026 House Judiciary Committee interim staff report, and a monitor may receive complaints from nonparties.⁹ The proceeding against OptumRx remains withdrawn from adjudication while the Commission considers a proposed consent agreement.¹⁰

Read as policy, this is a striking result. Read as law, it is an absence.

The unresolved Section 5 question

The unresolved question is whether Section 5 reaches the challenged conduct. The Commission’s 2022 policy statement asserts that Section 5 extends beyond the Sherman and Clayton Acts to reach unfair conduct that tends to impair competitive conditions.¹¹ A policy statement, however, is not a judicial holding. The settlements preserved the negotiated relief and left the Commission’s standalone Section 5 theory untested in this matter. Each Commission vote to accept a consent agreement for public comment drew one affirmative vote, with Commissioner Meador recused.¹²

For practitioners, three consequences follow:

• The current documents are proposed administrative orders, not judicial consent decrees. If the Commission finalizes them, each order will bind the named respondents and covered affiliates. The Commission states that a final consent order carries the force of law against future conduct by those parties.¹³
• No judicial opinion means no precedent on the Commission’s standalone Section 5 theory. Private plaintiffs cannot sue directly under Section 5. They must plead an available federal or state cause of action.¹⁴
• The proposed orders would last ten years after their implementation dates, but federal law permits the Commission to reopen, alter, modify, or set aside an order under specified conditions. The obligations would be durable, not immutable.¹⁵

The pharmacy provisions

Chad’s analysis gives the pharmacy provisions separate attention because independent owners will feel them directly. A standard option based on acquisition cost plus a dispensing fee changes the baseline for later contract discussions. Caremark’s hub protections, backed by an independent monitor, matter to any pharmacy that has watched network participation become leverage. Whether these provisions reshape practice will depend on plan-sponsor adoption and pharmacy participation. Both proposed orders preserve defined paths for parties to choose terms outside the standard offering.¹⁶

Legislation could reach beyond two firms and one administrative proceeding. The PBM Reform Act of 2025, introduced in July 2025, would limit retained pharmacy benefit manager remuneration in Medicare Part D to bona fide service fees, require substantial reporting, and prohibit abusive spread pricing in Medicaid. Its compensation provisions address covered Part D drugs rather than insulin alone.¹⁷

The Commission achieved through two negotiated agreements what it has not yet tested through adjudication. The agreements may deliver meaningful relief, but the efficiency came without precedent.

Is enforcement that reforms an industry without producing a judicial holding a triumph of pragmatism, or a debt the next Commission must pay?

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