CVS reaches insulin pricing settlement with FTC

CVS Health said on Tuesday it has reached a proposed settlement agreement with the FTC ​on insulin pricing. PBMs, which set how drugs are covered ‌by health insurance, have faced a decade of scrutiny from regulators and lawmakers over pricing practices. The company said on Tuesday its pharmacy benefit management unit, Caremark, has long focused on ​lowering prescription drug costs. The FTC declined to comment. Shares of ​CVS Health rose 1.05% in afternoon trading. CVS expects the settlement process ⁠to conclude in the coming weeks, but said final terms were still ​pending and would be confirmed once the settlement was officially finalized. A source familiar ​with the terms of the settlement said CVS' deal was modeled on a deal the FTC struck with rival Express Scripts, which is owned by Cigna. That deal was finalized two weeks ​after being proposed, and CVS' could be signed into effect sooner, they ​said. Cigna's settlement required the company to curb rebate pricing, where a drugmaker gives the pharmacy benefit ‌manager ⁠a discount after a certain drug is dispensed. Regulators have said this model incentivizes companies to introduce higher list prices and steer customers to more expensive drugs, driving larger discounts. Cigna's deal also required the company to adopt more transparency ​and shift to ​a fee-based compensation ⁠structure. Violating terms of the deal could trigger further action from the regulator or lead to penalties.