Every once in a while, a healthcare headline comes along that makes people do a double-take.
“FTC Secures Landmark Settlement with Express Scripts to Lower Drug Costs for American Patients.”
That’s right. Landmark. Lower drug costs. Insulin. Accountability.
Cue the record scratch.
If you’ve spent any amount of time in the diabetes space, as a patient, parent, clinician, educator, or anyone who has ever stood at a pharmacy counter holding a receipt, then you know insulin prices are ridiculous. Over the last 20 years, pharmaceutical manufacturers have increased the price of insulin year after year, and depending on which study you look at, estimates range anywhere from 184% to 600%.
When gasoline prices rise, news outlets talk about “pain at the pump.” Well, if you use an insulin pump, that phrase suddenly feels a little too on the nose.
So yes, I want to acknowledge upfront that this really is a landmark decision. But just like when I step on the scale when I’ve had an active week after Super Bowl Sunday, we should read these headlines with cautious optimism. Because while this settlement sounds like a win, and in many ways, it is. Healthcare policy has a long and storied tradition of saying “trust us” right before adding an asterisk.
So let’s talk about what this actually means, why it matters, and why the devil is already sharpening his pitchfork, or in this case, a big 18-gauge needle, in the details.
What Just Happened, in Plain English
The Federal Trade Commission (FTC) reached a settlement with Express Scripts, one of the three pharmacy benefit managers (PBMs) that effectively control the prescription drug marketplace.
The FTC alleged that Express Scripts used rebate-driven practices that artificially inflated insulin list prices, steering formularies toward higher-priced products because those generated bigger rebates, rebates the PBM could keep a slice of.
(Because they did.)
Patients, meanwhile, paid cost-sharing based on the inflated list price. You know, the price that nobody actually pays… except the patient.
Under the settlement, Express Scripts must:
- Stop favoring higher list-price drugs when identical lower-cost versions exist
- Offer plans where patient cost-sharing is based on net price, not list price
- Delink manufacturer compensation from list prices
- Increase transparency to plan sponsors
- Shift pharmacy reimbursement to acquisition cost plus a dispensing fee
- Expand access to insulin affordability programs
- Reshore its massive group purchasing organization back to the U.S.
The FTC estimates this could reduce drug costs by up to $7 billion over 10 years.
That’s a lot of cupcakes.
Why This Is Actually a Big Deal
For years, PBMs have insisted they’re the heroes of the drug pricing story, negotiating discounts, managing formularies, and “saving the system billions.”
And technically, they weren’t lying. They just left out the part where they were pocketing the savings instead of passing them on to patients.
This settlement does something important: it attacks the incentive structure, not just the symptoms.
Rebates tied to inflated list prices created a system where:
- Manufacturers raised prices to offer bigger rebates
- PBMs benefited from those rebates
- Patients paid more out-of-pocket
- Everyone blamed everyone else
By forcing Express Scripts to offer models based on net prices, the FTC is saying the quiet part out loud: this system wasn’t broken, it was working exactly as designed.
A system that worked very well for Express Scripts.
So Why Am I Still Nervous?
Because healthcare reform doesn’t fail loudly. It fails quietly, through optional adoption, slow timelines, and “standard offerings” that aren’t actually standard.
These changes aren’t automatic
Most of the reforms Express Scripts agreed to are offerings, not mandates.
Translation: employers and plan sponsors still have to choose them.
Some will. Some won’t. Some will say, “We love this idea,” and then quietly renew their rebate-based contract because premiums look better on a spreadsheet.
Patient savings only happen if benefit designs change. And benefit designs move at the speed of contract renewals and fiscal calendars, not press releases.
Premiums vs. point-of-sale pain
Rebates have been used for years to offset premiums. Remove them, and suddenly:
- Drug prices may be more honest
- But premiums may rise in the short term
That’s not politically popular, especially for employers trying to keep costs stable. There’s a real risk that premium optics slow adoption, even if patients would benefit at the pharmacy counter.
Healthcare loves savings, just not if they show up on the wrong line item.
PBMs don’t lose revenue… they relocate it
This is not Express Scripts’ first rodeo.
If rebates shrink, expect:
- Higher administrative fees
- New “value-based” service charges
- Data, analytics, and reporting add-ons
- Creative contract language that technically complies while preserving margins
The FTC can regulate behavior, but it can’t regulate imagination.
And PBMs are the DreamWorks of the healthcare system.
Insulin Is the Wedge, Not the Whole Door
Insulin is the perfect starting point for system-wide change. It’s universally recognized, politically sensitive, emotionally resonant, and extremely well-documented.
But the real question is whether this logic extends beyond insulin…to GLP-1s, specialty drugs, oncology, and biosimilars.
If insulin reform becomes a fenced-in exception rather than a template, then this is progress, but not transformation.
How Long Until This Actually Matters?
Even after the 30-day public comment period, implementation will be phased.
Realistically:
- Some transparency requirements may kick in quickly
- Structural changes will take 6–18 months
- Many plans won’t see changes until the next plan year
So if you’re expecting to walk into a pharmacy next month and feel the difference, probably not. This is more of a “check back in a few years” situation than an overnight win.
What This Means for People with Diabetes
In the near term, some patients may see lower insulin out-of-pocket costs. Others may see no change at all. Much of this will depend on employer choices.
In the longer term, this cracks open the PBM black box. It creates legal precedent. And it puts pressure on Caremark and OptumRx.
And that last point matters a lot.
Because Express Scripts isn’t the endgame, it’s the first domino.
Final Thought: Cautious Optimism, Heavy Monitoring
This settlement is real progress. Not performative progress. Not “let’s study this for five more years” progress. Actual structural reform with teeth.
But healthcare history tells us this part is critical: implementation is everything.
If employers opt in, if enforcement is aggressive, and if the FTC follows through with other PBMs, this could mark the beginning of the end of rebate-driven drug pricing as we know it.
If not? We’ll get better press releases, slightly clearer contracts, and the same old receipt shock at the pharmacy counter.
I hope I’m wrong. I’d love to be wrong.
But until then, I’ll keep celebrating the win, with one eyebrow raised.