The Federal Trade Commission announced a settlement with Caremark Rx LLC and its affiliate Zinc Health Services LLC on July 14, ending an antitrust case over insulin pricing practices. The agreement marks the second major deal the agency has reached with a pharmacy benefit manager this year.
The settlement mandates changes at Caremark, a CVS Health subsidiary, to reduce patient costs, improve transparency, and treat community pharmacies more fairly. The FTC projects the deal will save consumers up to $8.5 billion over the next decade, with another $4.5 billion in potential savings from point-of-sale rebates during the same period.
FTC targets rebate-driven pricing
FTC Chairman Andrew N. Ferguson stated the agency will not tolerate anticompetitive behavior that raises prices for consumers. He noted the settlement delivers real savings to those struggling with high prescription costs and prevents Caremark from blocking hub pharmacies, which help patients find the lowest out-of-pocket options.
The terms resemble those in a February agreement with Express Scripts. Both deals separate pharmacy benefit manager fees from drug list prices, increase transparency, and permit retail pharmacies to adopt a cost-plus reimbursement model. The case originated from a 2024 lawsuit accusing Caremark, Express Scripts, and Optum of inflating insulin prices through rebate practices that favored high manufacturer payments over lower net costs.
The agency argued this system let pharmacy benefit managers keep inflated rebates tied to list prices while shifting costs to patients. Copays and coinsurance are calculated from those same inflated prices. With the settlement finalized, the FTC has resolved its case against Caremark. Optum’s case remains pending while the agency reviews a proposed consent agreement.
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Settlement addresses broader industry concerns
The order also responds to a January 2026 House Judiciary Committee staff report, which examined how CVS allegedly stifled competition. The agreement bars Caremark from interfering with pharmacies that collaborate with hub service providers—platforms that manage benefits, prior authorization, and financial assistance. A monitor will track complaints related to this rule.
Additional requirements include ending bias against lower-cost drug versions on standard formularies and passing rebates directly to members at the point of sale. Plan sponsors will now have the option to abandon rebate guarantees and spread pricing. Caremark must also separate fees paid by drug manufacturers from list prices for its standard offering while continuing its group purchasing activities in the U.S.
The changes extend beyond insulin. The settlement forces Caremark to maintain or establish programs capping out-of-pocket insulin costs for members. These benefits must apply to all members when a plan sponsor’s formulary includes a covered insulin product, unless the sponsor opts out in writing. The measures aim to dismantle financial incentives that have long shaped pharmacy benefit manager operations, often harming patients and smaller pharmacies.
The Commission voted 1-0-1 to approve the consent agreement for public comment, with Commissioner Meador recused. Comments will be accepted for 30 days before the order becomes legally binding.
