What's changing, why it matters and how decision-makers should respond
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Author: Nathan Drapkin

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The Federal Trade Commission (FTC) reached an agreement with Express Scripts that requires the pharmacy benefit manager (PBM) to offer a new, more transparent, net‑price‑based pharmacy option. This mandate isn't universal, as it doesn't require the PBM to apply these economics across all clients.

Cigna's previous "rebate‑free" messaging is directionally consistent but broader than what the settlement mandates. The settlement sets a new regulatory floor — not a full market overhaul — but it gives employers a compliant, more transparent alternative.

Key takeaways

Why the FTC-Express Scripts settlement matters now

  • You'll have access to a regulator‑approved, net‑based pricing model in 2027 — 2028.
  • Member affordability can improve (copays based on net, not list price).
  • Rebate economics will shift; budget and premium strategies may need updates.
  • Transparency will increase — but savings will depend on definitions, audit rights and enforcement in your contract.

Bottom line: The settlement expands choice. Real value shows up only if you adopt the option and hold Express Scripts to the terms through disciplined contracting.

Timing

  • January 1, 2027: Standard option is fully available
  • January 1, 2028: Economic mechanisms (point-of-sale rebates, elimination of rebate guarantees, spread‑free pricing) is in place
  • Settlement duration: 10 years, with strong early oversight

Plan cycle tip: If you're considering adoption for 2027, begin Request for Information/Request for Proposal updates, modeling and contract redlines in Q2 — Q3 2026.

What the settlement changes

Express Scripts must offer a new "standard option" that includes:
  • Rebate delinked pricing (rebates no longer tied to list prices)
  • Limits on spread pricing
  • Member cost sharing based on the drug's net price
  • Expanded transparency, including disclosure of intermediary compensation
  • Access to lower-list price drugs when they aren't net competitive
For this option — and for Cigna fully insured plans — member out-of-pocket costs cannot exceed the net unit cost of a drug.

What the settlement doesn't change

  • Employers don't have to adopt this new option.
  • Customized and legacy structures can stay in place.
  • There are no penalties or findings of wrongdoing.
  • Traditional rebate based models remain available for non electing clients.

What the FTC-Express Scripts settlement means for employers

If you elect the new option, you gain:

  • Member cost-sharing tied to net price (improved affordability)
  • Less reliance on rebates to fund your benefit — market impact depends entirely on adoption and contracting discipline
  • More visibility into PBM fees and financial flows
  • Better alignment around lower‑cost drugs

If you don't elect the new option, nothing changes. The value of this model depends on the contract. Transparency is offered — but not guaranteed — without the right definitions, audit rights and enforcement language. Real change occurs only if sponsors elect the option and hold Express Scripts to its terms.

What the FTC-Express Scripts settlement means for members

Under the new option:

  • Cost‑sharing is based on net cost, not the list price.
  • Out‑of‑pocket costs can't exceed the drug's net price.
  • Lower‑list‑price alternatives receive fair consideration if clinically appropriate.

Affordability improves at the point of sale, but premium impacts depend on how rebates were previously used to offset plan cost.

Questions employers should consider

  • How does net‑price‑based cost sharing impact total plan cost versus member affordability?
  • What happens to rebate value and fee structures?
  • Do we need to adjust network, specialty or formulary strategy?
  • Do our contracts clearly define net cost, reporting rights and audit access?

Learn more

Federal Trade Commission settlement with Express Scripts (February 2026) requires Express Scripts to offer a regulator approved standard option with net price based member cost sharing, limits on rebate driven and spread pricing, expanded transparency and ongoing FTC oversight.
FTC consent order and Federal Register analysis details the legal terms of the settlement, implementation timelines and enforcement mechanism, and clarifies that adoption of the standard option is optional for plan sponsors.
Ongoing Federal Trade Commission enforcement actions involving pharmacy benefit managers reflects increased use of litigation, consent orders, monitoring, and reporting requirements to influence PBM pricing, formulary and transparency practices.

Bottom line

The settlement expands choice. For sponsors seeking greater alignment with net costs and member affordability, the new option provides a compliant pathway — with outcomes defined by design and execution. Nothing happens automatically — real change only occurs if a sponsor chooses the option and enforces it through disciplined contracting.

Leading employers will:

  • Model cost scenarios early.
  • Tighten definitions, reporting and audit rights.
  • Pilot where appropriate (e.g., specialty first).
  • Communicate member impacts clearly.
  • Govern with speed and discipline.

Contact your Gallagher consultant or Gallagher's Pharmacy and Health Plan Services to help your organization explore financial scenarios, negotiate enforceable contract language and implement with strong governance so transparency translates into real savings and value.

Author Information

Disclaimer

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.