FTC Settlement With Caremark Signals New Compliance Expectations for PBMs

Key Takeaways

• The Federal Trade Commission (FTC) has proposed a consent order resolving its insulin pricing case against CVS Caremark, requiring changes to rebate practices, formulary management, pharmacy reimbursement options, and transparency measures.¹
• The proposed settlement closely mirrors the FTC's earlier agreement with Express Scripts and may establish a framework for future pharmacy benefit manager (PBM) compliance expectations.²
• If finalized after the public comment period, the consent order will carry the force of law and could influence PBM contracting, pharmacy relationships, and drug pricing practices across the industry.¹

The FTC has proposed a consent order resolving its antitrust case against Caremark Rx LLC and Zinc Health Services LLC, marking the agency's second major settlement this year involving one of the nation's largest PBMs over insulin pricing practices.¹

The proposed settlement requires Caremark to implement a series of business practice changes affecting rebate administration, formulary design, pharmacy reimbursement, transparency, and patient access. Although Caremark has not admitted liability, the agreement would resolve the FTC's allegations that the PBM participated in rebate practices that contributed to higher insulin list prices and increased out-of-pocket costs for certain patients.¹

The agreement remains subject to a 30-day public comment period before the FTC determines whether to issue a final consent order. If finalized, the order will become legally enforceable with respect to Caremark's future conduct.¹

Settlement Builds on FTC's Insulin Pricing Litigation

The settlement stems from the FTC's 2024 administrative complaint against Caremark, Express Scripts, and OptumRx, in which the agency alleged that the PBMs used rebate arrangements that incentivized higher list prices for insulin products. According to the complaint, manufacturers competed for formulary placement by offering increasingly large rebates tied to drug list prices, while patients whose cost sharing was based on list price often did not receive the benefit of those rebates.²

Caremark's proposed settlement follows a similar agreement reached earlier this year between the FTC and Express Scripts. Proceedings involving OptumRx have been withdrawn from adjudication while the Commission considers a proposed consent agreement.¹

Proposed Order Would Require Significant Business Practice Changes

Under the proposed consent order, Caremark would be required to implement a number of operational changes intended to address the practices challenged in the FTC's complaint.²

According to the FTC, these include the following:

• Ending discrimination against lower wholesale acquisition cost versions of covered drugs on standard formularies. 
• Offering plan sponsors a standard option that passes manufacturer rebates through to members at the point of sale, reducing patient cost sharing rather than basing out-of-pocket costs on higher list prices. 
• Delinking manufacturer fees paid to the PBM and its group purchasing organization from drug list prices. 
• Offering plan sponsors alternatives to rebate guarantees and spread pricing. 
• Expanding transparency regarding PBM financial arrangements and contracting practices. 
• Offering retail community pharmacies an alternative cost-plus reimbursement model. 

Healthcare Dive noted that these provisions closely resemble those included in the Express Scripts settlement, suggesting that the FTC is developing a consistent framework for PBM reform through negotiated consent orders rather than monetary penalties.³

Hub Pharmacy Provisions Address Patient Access Concerns

A notable feature of the proposed settlement involves protections for pharmacy hub service providers.

The consent order would prohibit Caremark from unfairly interfering with network pharmacies' ability to work with hub pharmacy service providers. According to the FTC, hub services can assist patients by coordinating benefits, facilitating prior authorizations, identifying financial assistance programs, supporting medication adherence, and improving prescription fulfillment. The order also provides for an independent monitor to review complaints regarding Caremark's interactions with pharmacies using hub services.²

These provisions reflect increasing regulatory attention to how PBM contracting practices may affect pharmacy operations and patient access to medications.

Transparency and Rebate Reform Continue to Evolve

The settlement also reflects broader regulatory efforts to increase transparency within the pharmaceutical supply chain.

For many years, PBM compensation has relied heavily on manufacturer rebates negotiated in exchange for formulary placement. Critics have argued that rebate-driven contracting can create incentives favoring higher list prices, while PBMs have maintained that negotiated rebates generate savings for plan sponsors and beneficiaries.

According to STAT, the settlement represents another step in the FTC's broader effort to reshape PBM rebate practices through negotiated structural reforms rather than financial penalties.⁴

Compliance Implications for PBMs and Health Plans

If finalized, the Caremark order could influence compliance expectations well beyond the parties to the settlement.

PBMs may increasingly evaluate whether their existing practices align with the types of obligations reflected in the proposed consent order, including the following:

• Rebate administration and pass-through models 
• Formulary decision-making 
• Manufacturer contracting 
• Pharmacy reimbursement methodologies 
• Transparency reporting 
• Relationships with hub pharmacy service providers 

Plan sponsors may also reassess PBM contracting arrangements as additional options become available regarding rebate guarantees, spread pricing, and point-of-sale rebate pass-throughs.

Looking Ahead

Although the proposed settlement applies only to Caremark, it may serve as a template for future PBM oversight if the FTC continues to pursue similar agreements across the industry.

Combined with the earlier Express Scripts settlement and the pending OptumRx matter, the Caremark consent order signals an evolving regulatory approach focused on structural business reforms intended to increase transparency, modify rebate incentives, and improve patient access to lower-cost prescription drugs.¹

References

1. FTC Secures Major Settlement With Caremark, Resolving Antitrust Case Against Second Drug Middleman. Federal Trade Commission. Published July 14, 2026. Accessed July 15, 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. In the Matter of Caremark Rx, LLC, Zinc Health Services LLC, et al. (Insulin). Proposed consent order and case materials. Federal Trade Commission. Published July 14, 2026. Accessed July 15, 2026. https://www.ftc.gov/legal-library/browse/cases-proceedings/221-0114-caremark-rx-zinc-health-services-et-al-matter-insulin 
3. Parduhn RP. CVS Caremark reaches settlement with FTC over insulin suit. Healthcare Dive. Published July 14, 2026. Accessed July 15, 2026. https://www.healthcaredive.com/news/cvs-caremark-ftc-settlement-insulin-suit/825224/ 
4. Silverman E. FTC settles lawsuit with CVS Caremark over insulin prices. STAT News. Published July 14, 2026. Accessed July 15, 2026. https://www.statnews.com/pharmalot/2026/07/14/ftc-settles-lawsuit-cvs-caremark-insulin-prices-access/