The Federal Trade Commission (FTC) has announced that Cigna’s Express Scripts will make significant changes to its business practices following a settlement aimed at addressing concerns over drug pricing and competition in the pharmacy sector.
The National Community Pharmacists Association (NCPA) welcomed the FTC’s decision, stating that it could lead to lower copays for consumers and help address long-standing issues related to high drug prices and reduced competition among pharmacies.
“This settlement will help lower consumers’ copays that have been tied to artificially inflated prices that feed Cigna’s insatiable appetite for more and more rebates and GPO fees,” said NCPA CEO B. Douglas Hoey. “The settlement also obliterates the big-PBM industry fiction that they work to lower the cost of drugs for Americans. Obviously, the opposite appears to be true. I hope this is only the beginning of righting the games leading to higher drug prices and harming competition. There remains a need for a deep look into specialty drug classification and steering, and the Express Scripts Prime Therapeutics so-called collaboration, to name a few.”
According to NCPA, its legal team spent years meeting with FTC staff to highlight what it described as harmful practices by pharmacy benefit managers (PBMs), which include limiting competition, reducing patient access, and increasing costs.
“NCPA has for some time witnessed the anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin and other drugs, which have hurt American pocketbooks. Employers should take note, too, of what the FTC has accomplished here and wake up to the fact that this settlement proves that for years, Cigna's Express Scripts drug pricing and reimbursement opacity may have caused them significant financial harm,” said NCPA General Counsel Matt Seiler. “While more work needs to be done to ensure adequate dispensing fees and sustainable Medicaid, Medicare, and Tricare drug pricing and reimbursement, this settlement is a huge step in the right direction for America.”
Under terms of the agreement with regulators, Express Scripts must end spread pricing—where PBMs charge payers more than they reimburse pharmacies—and decouple rebates from list prices on drugs. The company’s group purchasing organization (GPO), Ascent, will relocate from Switzerland back to the United States. The settlement also requires Express Scripts to adopt a cost-plus model when reimbursing independent pharmacies with three or fewer locations in commercial plans starting in 2027 or sooner. The company will be subject to FTC monitoring for ten years.
“The cost-plus model element is very important,” said Hoey. “We don’t yet know the details, but it’s critical that pharmacies are reimbursed at a level that covers their cost of acquiring, dispensing, and monitoring medicines and leaves them with a reasonable profit. The big insurers and their PBMs are notorious for reimbursing pharmacies at rates below their operating costs, which causes them to lose money and ultimately go out of business. We look forward to more details on this element of the agreement.”
Hoey added that low reimbursement rates are contributing factors behind so-called pharmacy deserts—areas where local pharmacies have closed down—leaving patients without easy access to healthcare providers. He urged employers selecting benefit plans for employees to demand greater transparency from brokers.
Founded in 1898, NCPA represents over 18,900 community pharmacies across the United States employing more than 235,000 people.
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