FTC and Express Scripts Reach Landmark Settlement to Reduce U.S. Drug Costs
The Federal Trade Commission (FTC) has reached a significant settlement with Express Scripts, Inc. (ESI), one of the largest pharmacy benefit managers (PBMs) in the United States. This agreement aims to overhaul ESI’s business practices to promote transparency and lower drug costs for consumers.
Details of the Settlement
The settlement requires ESI to implement changes expected to reduce patients’ out-of-pocket costs for insulin by an estimated $7 billion over the next decade. Additionally, community pharmacies are projected to gain millions in new revenue annually.
Background of the Lawsuit
The FTC’s action against ESI stems from allegations that the company manipulated the list price of insulin and engaged in unfair rebating practices. These actions restricted patients’ access to more affordable medications and shifted the financial burden of high drug prices onto vulnerable populations.
Statements from FTC Leadership
FTC Chairman Andrew N. Ferguson expressed that this agreement aligns with a broader commitment to reducing healthcare costs for Americans. He highlighted that the settlement would not only alleviate financial burdens for patients reliant on ESI for essential medications but also benefit community pharmacies.
Key Terms of the Consent Order
- End the preference for higher-cost versions of drugs over lower-cost alternatives.
- Ensure that patient out-of-pocket expenses are based on net prices rather than inflated list prices.
- Provide access to the TrumpRx program as legal and regulatory changes allow.
- Guarantee insulin benefit access through the Patient Assurance Program unless a sponsor opts out.
- Allow plan sponsors to leave rebate guarantees and spread pricing.
- Disconnect drug manufacturers’ payments from list prices.
- Enhance transparency for plan sponsors with mandatory drug-level reporting.
- Shift to a fairer reimbursement model for retail community pharmacies.
- Reshore its group purchasing organization, Ascent, from Switzerland to the U.S., enhancing local purchasing activity by over $750 billion.
Public Comment Period
The FTC has opened a 30-day period for public comments on the proposed consent agreement. The commission has voted 1-0 in favor of accepting the agreement for public consideration, with one commissioner recused. Comments can be submitted through Regulations.gov.
In conclusion, the FTC’s landmark settlement with Express Scripts is poised to have a substantial impact on prescription drug pricing and access in the United States. As the healthcare landscape evolves, enhanced transparency and reduced costs remain critical objectives for regulatory agencies.
