FTC, Express Scripts reach settlement in insulin pricing case

By Paige Minemyer – The Federal Trade Commission and Cigna's Evernorth unit have officially reached a settlement that resolves allegations that the company's pharmacy benefit manager artificially drove up prices for insulin. As part of the settlement, Evernorth's Express Scripts has agreed to several key business changes that are designed to reduce insulin prices significantly, the FTC said in a press release. The PBM will stop listing preferred drugs at the high wholesale acquisition cost rather than lower cost versions on its standard formularies, and will offer access to Trump Rx's direct-to-consumer platform as part of its standard offerings. Read Full Article...

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1. Shift Toward Net Drug Pricing and Broader Patient Access: Express Scripts will offer a standard plan option where patients’ out-of-pocket costs are based on the net price of a drug rather than its list price. The company will also extend full access to its Patient Assurance Program for insulin users on a formulary, unless plan sponsors opt out. These changes aim to improve affordability and transparency in drug pricing.

2. Overhaul of Rebate-Based Pricing and Reshoring of Operations: A new standard benefit design will allow plan sponsors to move away from rebates and spread pricing, and delink drugmaker payouts from list prices. Express Scripts will also relocate its group purchasing organization, Ascent, from Switzerland to the U.S. These structural changes reflect a shift toward greater domestic control and cost transparency.

3. Response to FTC Allegations and Financial Trade-Offs: The FTC alleged Express Scripts and two other major PBMs inflated insulin prices by preferencing rebates over net prices. In response, the company launched a rebate-free model and admitted it expects a significant financial hit from the transition. The settlement is open to 30 days of public comment, with no clarity yet on whether similar actions will follow for Optum Rx and CVS Caremark.

PBM Reform Comes to Washington But It’s Only the Tip of the Iceberg

By Wendell Potter – Congress tucked long-sought pharmacy benefit manager reforms into the government spending package that President Donald Trump signed this week to keep the federal government funded. The bill cleared the House on a razor-thin vote after passing the Senate last week, ending a brief shutdown and funding the government through September. The PBM provisions are real progress. They begin to unwind one of the most perverse incentives in the drug supply chain by changing how PBMs are paid in Medicare Part D, shifting compensation away from rebate-driven, list-price-inflating arrangements and toward flat, market-based service fees. Read Full Article...

HVBA Article Summary

1. Current PBM Reform Is Limited to Medicare: The newly passed PBM (Pharmacy Benefit Manager) reform focuses exclusively on Medicare’s outpatient drug benefit by “delinking” PBM compensation from drug rebates and list prices. However, it does not extend to the commercial insurance market, where nearly two-thirds of Americans receive their coverage. This leaves a large portion of the healthcare system — particularly employer-sponsored and individual plans — unaffected by the new changes.

2. The Department of Labor Proposes Expanded Transparency for Employer Plans: Recognizing the gaps in the federal legislation, the Department of Labor recently proposed a significant transparency rule targeting PBMs operating under employer-sponsored plans regulated by ERISA. For the first time, PBMs would be required to disclose rebate arrangements, profit margins, and pharmacy-related fees to their employer clients. Employers would also gain the right to audit PBM practices, enabling them to better assess whether the compensation structures are reasonable and aligned with fiduciary responsibilities.

3. Broad Coalition Pushed Reform; More Work Lies Ahead: The inclusion of PBM-related provisions in the recent spending bill was the result of sustained, coordinated advocacy by pharmacists, employers, patient groups, and policy organizations like the LOOP NOW Coalition. While these changes mark an important milestone for Medicare beneficiaries, many advocates and lawmakers agree that the reforms only address a small part of a much larger problem. Future efforts are expected to focus on employer plans, ACA marketplace coverage, and complex drug distribution systems, signaling that the broader reform process is just beginning.

Trump signs $1.2T spending package that funds HHS, enacts PBM reforms, telehealth and hospital-at-home measures

By Heather Landi and Dave Muoio – President Donald Trump on Tuesday afternoon signed a massive funding package that ends a brief government shutdown and provides full-year funding for the federal government through the end of the year. The House voted earlier in the day to pass the package by a vote of 217-214. As part of negotiations between Senate Democrats and the White House, the House moved forward to vote on a package that included five appropriations bills while splitting off a funding bill for the Department of Homeland Security (DHS). Read Full Article...

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1. Expanded Healthcare Funding and Program Extensions: The legislation provides $116.6 billion in discretionary funding for the Department of Health and Human Services and reduces administrative spending at the agency by $100 million. It extends the Acute Hospital Care at Home program for five years and Medicare telehealth flexibilities for two years. These provisions remove Medicare’s geographic restrictions for telehealth and allow more types of practitioners to offer services. Healthcare organizations welcomed the stability this brings, enabling providers to plan, scale, and collect data for long-term adoption.

2. New Pharmacy Benefit Manager (PBM) Regulations: The bill enacts reforms to PBM practices, including prohibiting compensation in Medicare Part D from being tied to drug list prices. It also mandates increased pricing transparency in contracts with employers. Major pharmacy groups applauded the move as a vital step to protect small businesses and lower drug costs. However, the PBM industry argued the reforms favor pharmaceutical companies and could unintentionally raise prescription prices.

3. Improved Oversight of Medicare Advantage and Outpatient Pricing: The legislation requires Medicare Advantage plans to maintain accurate provider directories, aiming to address so-called "ghost networks." It also mandates that hospitals assign unique identification numbers to outpatient service sites to improve pricing transparency. These changes are intended to help the Centers for Medicare & Medicaid Services track and manage service costs more effectively. While praised for improving accountability, some hospital groups warned the added administrative tasks may burden healthcare providers.

Express Scripts reaches ‘landmark’ settlement with FTC in insulin suit

By Rebecca Pifer Parduhn – The Federal Trade Commission has agreed to what it called a “landmark” settlement with Express Scripts, allowing the company to bow out of the agency’s lawsuit against major pharmacy benefit managers for allegedly inflating the cost of U.S. insulin. In return, Express Scripts, which is owned by Cigna and is one of the largest PBMs in the country, has agreed to major changes to its drug benefit designs, including no longer preferring drugs with high list prices on its standard formularies and delinking its compensation from the savings it negotiates with drugmakers, the FTC announced Wednesday. Read Full Article...

HVBA Article Summary

1. Increased Transparency and Restructuring: Express Scripts has committed to significant transparency measures as part of the FTC settlement. These include disclosing more detailed data on drug spending, revealing any payments or incentives made to brokers who influence employer PBM choices, and providing pharmacy-related data to meet federal transparency requirements. Additionally, the company will relocate its group purchasing organization, Ascent, from Switzerland back to the U.S. This move is expected to generate up to $750 billion in domestic economic activity over ten years and bring Ascent under U.S. legal oversight, enhancing regulatory accountability.

2. Reforms to Reduce Costs and Support Pharmacies: The agreement is designed to reduce patients’ out-of-pocket drug costs by an estimated $7 billion over the next decade. One of the major changes includes shifting to a cost-plus reimbursement model for pharmacies, where payments are based on the actual drug cost plus a dispensing fee. While specific rates were not disclosed, the model is expected to offer more predictable and sustainable payment for community pharmacies. The reforms also aim to insulate consumers from inflated list prices by ensuring that their out-of-pocket costs are based on net prices after negotiated savings.

3. Limited Financial Impact and Industry-Wide Pressure: Despite the scope of the settlement, analysts suggest the financial impact on Express Scripts and its parent company, Cigna, will be limited, as many of the reforms—such as rebate-free models and cost-plus pharmacy payments—were already underway. However, the deal could have broader implications for the pharmacy benefit management industry by accelerating shifts away from rebate-driven pricing models. It may also increase pressure on other PBMs, like Optum Rx and CVS Caremark, to negotiate settlements as public and regulatory demands for drug pricing reform continue to grow.

How to close the LTC insurance gap

By Bruce Shutan – An impending crisis is looming over the employee benefits landscape, marked by an aging population and a 45% spike in unpaid family caregivers over the past decade to about 63 million Americans. Each day, more than 11,000 Americans turn 65, more than half of whom will need some level of long-term care (LTC) serviceswithin their lifetime, projects the Department of Health and Human Services. Yet just 3% of Americans over age 50 have any LTC insurance protection, according to LIMRA, leaving most of them on the financial hook to cover these expenses on their own. One major driver is that these standalone policies are costly — a once buoyant market with more than 100 carriers that has dwindled to about a dozen players. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Emergence of Alternative LTC Insurance Solutions: The traditional long-term care insurance market has contracted significantly, making standalone policies less accessible and more expensive for consumers. In response, insurers are increasingly offering hybrid life insurance policies with LTC riders, extended premium payment periods, and annuity-linked products. These alternatives are designed to make coverage more affordable and flexible, helping to address the growing gap in LTC protection.

2. Educational Gaps and Industry Challenges: Many consumers are confused about the differences between long-term care insurance, Medicare, and Medicaid, which can lead to misunderstandings about their actual coverage. This confusion highlights the need for better education from advisers and employers to ensure individuals are aware of their options and prepared for future care needs. Industry experts suggest that ongoing communication and educational initiatives, such as workshops and off-cycle enrollments, can help bridge this knowledge gap.

3. Growing Employer and Employee Interest in LTC Benefits: Research indicates a rising interest among employers and employees in workplace LTC solutions, with larger organizations especially likely to see high demand. Innovative products like hybrid insurance and annuities are gaining traction as employers seek to enhance their benefits offerings and support workforce financial wellness. Addressing LTC needs is increasingly viewed as a critical component of comprehensive retirement and financial planning.

National Health Care Spending Increased 7.2 Percent In 2024 As Utilization Remained Elevated

By Micah Hartman, Anne B. Martin, David Lassman, Aaron Catlin – Health care spending reached $5.3 trillion, or $15,474 per person, growing 7.2 percent in 2024 (exhibit 1). This was the second consecutive year of growth above 7 percent (growth was 7.4 percent in 2023), after growth of 4.1 percent in 2021 and 4.8 percent in 2022. The strong growth in both 2023 and 2024 was driven by nonprice factors (such as increased demand for care and changes in the composition of the health care goods and services consumed), ¹ as evidenced by growth in personal health care spending that averaged 8.9 percent per year (calculated from exhibit 2), the highest average growth rate for two consecutive years since 1991–92, when it was 9.1 percent (data not shown for 1991–92). ² The increased use of health care goods and services in 2024 was somewhat higher than many health insurers anticipated. ³  Read Full Article...

HVBA Article Summary

1. Sustained High Growth in Health Care Spending: The United States experienced a second consecutive year of health care spending growth above 7%, with 2024 seeing a 7.2% increase. This rate of growth is notably higher than the years preceding the pandemic and reflects a return to historically elevated spending increases not seen since the early 1990s. The trend is largely attributed to increased utilization and intensity of health care services rather than price inflation alone.

2. Shifts in Insurance Coverage and Enrollment: While the insured share of the population remained high in 2024, there was a slight decline from the previous year's peak, primarily due to a drop in Medicaid enrollment as pandemic-era provisions ended. At the same time, enrollment in Affordable Care Act Marketplace plans and employer-sponsored insurance increased, partially offsetting the decrease in Medicaid coverage. These shifts highlight the ongoing impact of policy changes and economic factors on insurance coverage dynamics.

3. Federal and State Spending Patterns Evolve: Federal government health care spending accelerated in 2024, driven by increased Marketplace subsidies and Medicare expenditures linked to recent legislative changes. Conversely, state and local governments saw their share of Medicaid costs rise as enhanced federal support was phased out, resulting in significant growth in state and local health spending. These developments underscore the complex interplay between federal and state funding responsibilities in the U.S. health care system.

GI benefits improve engagement while lowering healthcare costs

By Paola Peralta – As employers continue their search for benefit solutions to help more employees, while curbing costs, investments in GI care are yielding significant results. Approximately 71% of Americans experience gastrointestinal (GI) issues — such as IBS and Crohn's Disease — at least a few times a month, according to a report from digital GI health solution Cylinder. These conditions cost employers $136 billion annually in costs associated with healthcare expenditures and other workplace factors. However, the addition of digital GI care solutions is proving to be an effective way to tackle both employee health and healthcare spending. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Digital GI Benefits Lead to Significant Healthcare Cost Savings: A recent peer-reviewed study published in the American Journal of Managed Care found that employees who used digital gastrointestinal (GI) health solutions had annual healthcare expenditures that were $2,026 lower — an 18% reduction— compared to nonparticipants. These savings included a notable decrease in pharmacy spending, a particularly valuable outcome for employers facing rapidly rising drug costs.

2. Early GI Intervention Supports Productivity and Reduces Turnover: Beyond measurable cost savings, improving access to GI care can deliver indirect financial benefits by reducing absenteeism and lowering employee turnover. Dr. Hau Liu emphasizes that early, clinically appropriate intervention helps employees better manage symptoms, which in turn boosts their productivity. Healthy employees are more likely to avoid hospital visits and take fewer sick days, contributing to a more engaged and stable workforce.

3. Employers Must Use Data and Feedback to Guide GI Health Strategies: To effectively address GI-related health issues, employers should begin by analyzing claims data and gathering employee feedback to understand the true scope of the problem. However, because GI costs often overlap with mental and women’s health and may not be clearly labeled, specialized tools — like Cylinder’s database of over 1,000 diagnostic codes — can help isolate relevant conditions. While third-party partners can assist, much of the foundational work can be done internally by leveraging workforce data and soliciting employee input.