By Amina Niasse and Jody Godoy
NEW YORK, July 14 (Reuters) – CVS Health’s Caremark has finalized a settlement with the U.S. Federal Trade Commission in which it agreed to curb use of after-market discounts known as rebates and count consumers’ TrumpRx purchases toward their deductibles, an FTC spokesperson said on Tuesday.
Similar to Cigna’s settlement with the FTC earlier this year, the deal would curb practices critics say contribute to high drug costs. It would also require CVS’ Caremark pharmacy benefit manager to include a patient’s payments through the TrumpRx drug website toward the deductibles some of its health plans require, once regulations are in place to facilitate the TrumpRx program.
The settlement is expected to bring billions of dollars in savings on drug prices, FTC Chairman Andrew Ferguson said in a statement.
“The FTC under President Trump won’t stand for anticompetitive behavior that drives up prices for American consumers,” Ferguson said.
U.S. President Donald Trump launched TrumpRx.gov, a website offering hundreds of generic and branded drugs at a discount, in February, with a particular focus on connecting consumers with low prices for highly popular weight-loss drugs from Eli Lilly and Novo Nordisk.
Health plan deductibles are the minimum spend members must reach before leveraging their coverage. TrumpRx.gov sends cash-pay customers to drugmaker websites for discounted drugs, but has operated outside of insurance, limiting its value for some American consumers.
CVS must also provide an option to clients that allows them to opt out of rebate payment models, a spokesperson for the FTC said. These rebates are paid by drugmakers to the pharmacy benefit manager and may or may not be passed on to the plan sponsor or consumer after a certain drug is dispensed.
Small pharmacies would also be given the option to be reimbursed for the actual cost of drugs they dispense plus a fee, in a bid to address complaints that pharmacy benefit managers do not fully reimburse independent local pharmacies.
“Today’s agreement advances and reinforces the changes we have already put in place and ensures affordability for families and patients across the country,” said Ed DeVaney, a president at Caremark.
The decision to eliminate rebates will vary based on the client and how individual employers choose to structure their own pharmacy benefit, a spokesperson for CVS said. But the company aims to encourage its clients to pass through discounts to individual members, CVS said in a release on Tuesday.
The FTC’s original lawsuit, launched in 2024, said Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx forced patients to pay higher prices for insulin.
CVS reached a proposed settlement with the regulator in March, and the FTC said the deal was similar to one with Express Scripts.
Regulators have said the rebate model incentivizes companies to raise list prices and ultimately steers customers to pricier drugs.
Pharmacy benefit managers negotiate the price of drugs with manufacturers, on behalf of plan sponsors, such as employers.
CVS will also enhance its reporting on the price of drugs and member payments it receives, shift to a fee-based compensation structure, and cap out-of-pocket cost of insulin at $25 per month, the company said.
(Reporting by Amina Niasse and Jody Godoy in New York; editing by Caroline Humer and Aurora Ellis)
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