FTC Secures Major Settlement with Caremark, Resolving Antitrust Case Against Second Drug Middleman
The FTC secured a settlement with Caremark Rx LLC, requiring changes to lower drug costs, enhance transparency, and prevent anticompetitive practices that inflated insulin prices and restricted pharmacy access.
The Federal Trade Commission finalized a settlement with Caremark Rx LLC and Zinc Health Services LLC, mandating reforms to reduce patients’ out-of-pocket drug costs and improve transparency in pharmacy benefit manager operations. The agreement locks in up to $8.5 billion in consumer savings over a decade and unlocks an additional $4.5 billion in rebate savings at the point of sale. Caremark, a subsidiary of CVS Health Corporation, must delink its fees from drug list prices and allow retail pharmacies to adopt a cost-plus reimbursement model. The FTC alleged that Caremark’s practices artificially inflated insulin prices and restricted access to lower-cost alternatives, harming patients whose copays and coinsurance were tied to inflated list prices.
Under the settlement, Caremark will implement drug affordability programs capping out-of-pocket insulin costs for members and ensure full access to these benefits unless plan sponsors opt out in writing. The company is also prohibited from interfering with pharmacies’ ability to work with hub pharmacy services, which streamline medication access, coordinate benefits, and provide financial assistance. A monitor will oversee compliance and review complaints related to these restrictions. The FTC’s action follows a lawsuit alleging that Caremark, along with other pharmacy benefit managers, prioritized rebates over net prices, driving up drug costs for consumers.
The settlement resolves the FTC’s case against Caremark, building on a prior agreement with Express Scripts Inc. in February 2026. A similar case against Optum has been paused pending a proposed consent agreement. The FTC’s complaint highlighted how inflated list prices shifted costs to vulnerable patients, particularly those relying on insulin. Caremark’s reforms aim to address these anticompetitive practices by enhancing transparency and ensuring fair treatment of community pharmacies. The proposed consent order was approved by the FTC with a 1-0-1 vote, as Commissioner Meador was recused.
The public may submit comments on the proposed consent agreement for 30 days via Regulations.gov. Once finalized, the order will carry the force of law, prohibiting Caremark from repeating the alleged practices. The settlement reflects the FTC’s broader efforts to lower healthcare costs and improve access to affordable medications, aligning with initiatives like TrumpRx to increase price transparency.