(RTTNews) - CVS Caremark (CVS), a health solutions company, announced a settlement agreement with the Federal Trade Commission (FTC) and said that it will resolve outstanding FTC litigation and investigations related to CVS Health, including its pharmacy benefits management and affiliated pharmacy businesses.
The settlement relates to the September 2024 lawsuit brought by the FTC against CVS Health's Caremark. The suit alleged that Caremark engaged in anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs, increased PBM (prescription drug benefit managers) profits, impaired patients' access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients.
Express Scripts (ESI) and OptumRx — and their affiliated group purchasing organizations (GPOs) were also named as defendants in the lawsuit.
Now, with the FTC securing a settlement agreement with Caremark, the litigation and investigations involving rebate practices, pharmacy network contracting, and vertical integration issues have been resolved.
According to the company, as outlined in the current settlement agreement, CVS Caremark will implement the following actions into its standard offering to commercial clients.
- To align certain member cost sharing with the net cost of medications after rebates to help push more savings to members at the point-of-sale.
- To simplify pricing structures by moving away from rebate guarantees and spread pricing.
- To expand transparency through improved reporting on drug pricing, rebates, and member payments, along with disclosure of broker and consultant compensation.
- To broaden affordability programs for medicines, including an offering that will cap members' insulin costs at $25 per month.
- To promote point-of-sale rebate passthrough as a standard option to encourage plan sponsors to share drug cost savings more directly with members at the pharmacy counter.
- To delink manufacturer compensation from list prices.
- To transition to acquisition-based reimbursement for independent retail pharmacies to closely align reimbursements with actual costs.
- Subject to regulatory conditions, count eligible purchases made through the TrumpRx discount program toward members' deductibles and out-of-pocket maximums.
CVS Caremark said the changes include affordability programs such as ReducedRx, which provides access to $25-per-month insulin at participating pharmacies.
CVS Caremark will begin implementing the provisions of the agreement in accordance with timelines established with the FTC and will continue working with regulators, employers, and industry partners to bolster transparency and affordability across the pharmacy benefit system.
CVS has traded between $58.50 and $106.90 over the last year. The stock closed Tuesday's trade at $106.18, up 0.26%.
In the after-hours market, CVS is down 0.93% at $105.20.
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