Industry
CVS Caremark Settles FTC Insulin Suit, Must End Rebate-Driven Formulary Preferences
CVS Caremark reached a settlement with the Federal Trade Commission over insulin pricing practices. The terms mirror the FTC's earlier settlement with Express Scripts and prohibit the pharmacy benefit manager from favoring higher-cost drug versions on standard formularies based on rebate arrangements. The settlement takes effect immediately upon court approval. For Medicaid managed care plans that contract with CVS Caremark or operate integrated PBM arrangements, this settlement signals continued federal scrutiny of rebate-driven formulary design and may preview future enforcement against similar practices affecting Medicaid populations.
Why it mattersMedicaid MCOs using CVS Caremark or similar PBM structures face heightened regulatory attention on rebate arrangements that may inflate drug costs, particularly for insulin and other high-cost therapeutics covered under managed care contracts.