HR Benecast · 2026-07-16 · 14 min
Key moments - from our scoring
Substance score
60 / 100
Five dimensions, 20 points each
Madison and Mike break down the details of the FTC's settlement with CVS Caremark, the largest PBM used by most clients, which follows the Express Scripts settlement announced earlier in the year. The settlement introduces a "standard offering" framework that PBMs must present to all plan sponsors - including public entities and self-insured employers - though sponsors can deviate by signing a template notice acknowledging awareness of alternative arrangements. Implementation is phased: by 2028, patient out-of-pocket costs cannot exceed net costs, TruRx purchases count toward cost-sharing, and PBM compensation must be delinked from list price (shifting from percentage-of-list-price to flat or per-occurrence fees). By 2029, additional provisions take effect including elimination of spread pricing, no rebate guarantees, point-of-sale rebates, and cost-plus reimbursement for retail pharmacies using actual acquisition costs. Mike raises concerns about the point-of-sale rebate requirement, noting it shifts costs to employers who will adjust premiums and deductibles accordingly, and criticizes the settlement's loose definition of "rebates" compared to CAA requirements. The hosts emphasize no changes impact 2027, focus on contracting strategy around new pricing models like CVS's TruCost (excluded from the settlement), and flag ongoing compliance challenges as FTC, CAA, and state regulations intersect.
Delinking shifts PBM compensation from a percentage of drug list price to flat fees, per-month fees, or per-occurrence fees, eliminating the conflict of interest that incentivizes PBMs to prefer high-priced drugs under the current GPO-based rebate model.
No changes impact plan design or pricing for 2027; the settlement's provisions begin with 2028 effective dates (out-of-pocket caps, delinking, TruRx counting toward cost-sharing) and 2029 effective dates (elimination of spread pricing, no rebate guarantees, point-of-sale rebates).
Point-of-sale rebates shift costs to employers, who offset them by adjusting premiums, deductibles, and maximum out-of-pockets, negating claims of automatic savings; plan sponsors expressed significant concern about this requirement.
The FTC's definition is looser than the CAA, which requires 100% pass-through of all rebates, fees, and manufacturer remuneration; the difference creates compliance challenges as multiple government branches implement inconsistent PBM regulations.
Yes, plan sponsors can choose alternative arrangements but must sign a template notice acknowledging awareness of the standard offering terms and their decision to deviate, which encourages but does not mandate adoption.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode delivers substantive policy breakdown of the FTC-CVS settlement with several non-obvious insights: the delinking mechanism, point-of-sale rebate cost-shifting to employers, definitional gaps between FTC and CAA rules, and the phased implementation timeline. However, it relies heavily on explaining existing regulatory concepts rather than generating novel analysis, and padding like throat-clearing ('how much time do we have?') and personal banter reduces density.
patient out of pocket costs may not exceed the net costs. Um, trumbrx purchases will also need to count towards member cost share.
employers and plan sponsors will simply adjust deductibles, adjust premiums, adjust max out of pockets. So the whole idea that you know, clients are going to save so many billions of dollars uh, by this is, is Washington funny math
The hosts apply a practical lens to well-known policy mechanisms (delinking, rebate passthrough), but the core frameworks and regulatory comparisons are standard industry talk. The main original contribution is the specific critique of point-of-sale rebate cost-shifting, but this is not deeply explored or contrarian enough to elevate the originality score meaningfully.
point of sale rebates will be incorporated into that offering
delinking is instead of a percentage of the list price, you translate that into some sort of, remember per month fee, a flat fee or some other type of per occurrence fee
Both speakers appear to be experienced consultants or benefits professionals with direct client-facing work (they reference sending templates to clients and negotiating contracts), giving them practitioner credibility. However, the episode does not establish their specific credentials, past roles, or scale of work, and they operate more as co-hosts than as interviewed guests, limiting the ability to assess true seniority.
So we sent out a template, uh, or a, an update to clients and there were several responses that came back
we've always had options. So whether it's been needing a pass through deal versus a traditional deal, we have both options
The episode names specific drugs (Ozempic, Wegovy), timelines (2028, 2029 implementation), and regulatory acts (CAA, FTC settlement, state laws), but lacks concrete numbers on financial impact, client case studies, or quantified outcomes. The settlement itself is referenced as 18 pages but not mined for specific data points or numerical examples that would anchor claims.
You have some very highly rebatable drugs actually lowering their list price. So think Ozempic, think wegovy.
patient out of pocket costs may not exceed the net costs
The conversation is collegial but lacks adversarial depth; hosts agree throughout and rarely push back substantively on each other's claims. Follow-ups are procedural rather than probing (e.g., 'let's talk about some of the provisions' vs. 'why do you think the FTC got this wrong?'). The closer - 'what did they miss?' - is the strongest question, but it is deflected with humor rather than explored.
Before we wrap this up, Mike, I do have one final question for you. Putting your, um, FTC commissioner hat on, what did they miss?
Yeah, well, uh, how much time do we have?
Computed from the transcript - who did the talking, and the words that came up most.
In this episode of Healthcare Headlines, Mike and Madison cover the FTC's settlement with CVS Caremark. They'll share the good and the bad, how it impacts insulin pricing, what it means for plan sponsors and more. Check out other podcast episodes at Employee Benefits Podcast | Employers Health .
Transcribed and scored by The B2B Podcast Index.
Speaker A: Foreign.
Speaker B: Hello, everyone. It is Madison. It is Mike. It is Healthcare Headlines. In today's episode, we are talking about a headline that we've been waiting a while for.
Speaker A: 16 weeks.
Speaker B: Right, but who's, who's counting? Right?
Speaker A: I was. You were too.
Speaker B: I definitely was as well. So the FTC has announced the details of its settlement with CDS Caremark. And for those of you who have been following along with us, you'll know that the Express Script settlement was published quite a while ago. And, uh, most of the things that we'll talk about today is express expected are very consistent with the Express Script settlement. Uh, but we thought because this is CVS Caremark, it's our largest, uh, PBM that most of our clients utilize, we better get on camera, uh, and do a recap of what's all included in the settlement and how it impacts our clients. But to just take a step back, uh, why don't we give the audience some background into where this all started?
Speaker A: Yeah, Mike. So this stems from a 2024 insulin pricing lawsuit that was filed by the FTC, um, against the big three PBFs. And the settlement, if you read it, it's 18 pages long. It goes far beyond insulin pricing. Um, it is a voluntary settlement and there are no admissions of fault or wrongdoing within that. Like you said, ESI was the first to settle in February. And then in March there was an announcement that CVS Caremark had reached a proposed settlement. We were on stage at the annual Benefits forum when this news broke. It's been a waiting game ever since. OptumRx also announced in early July that it also has reached a proposed settlement. But we don't know the terms of that particular deal yet because it is awaiting approval from the FTC chair. But I suspect it will be, uh, closely mirroring the terms that we've seen out of the first two settlements.
Speaker B: I think that's a pretty, uh, clear crystal ball to look into. So let's jump into what this one says in the Express Scripts offer or settlement. It talked a lot about a standard offering. And the whole concept of a standard offering is in this one too. Uh, what's that all about?
Speaker A: Yeah, that's the way that these provisions in the FTC are going to be incorporated, um, for plan sponsors. So they say that a standard offering must be made to all plan sponsors. And this does include public entities, all real self insured employers. And you actually may deviate from the standard offering, but if you do so, you have to sign a template notice acknowledging that you were aware of the terms of the standard offering. And you chose an alternative arrangement. But really this is a way to encourage adoption of the FTC's preferred model. And, and uh, ultimately though the plan does retain the autonomy to choose, It'll be interesting to see how many plan sponsors are willing to sign that template agreement and whether there will be widespread deviation from that model moving forward.
Speaker B: Absolutely. Um, let's talk about some of the provisions that are required as part of the standard offering.
Speaker A: These do have rolling implementation I would say. So there are some parts that take effect in 2028, in some cases that take effect in 2029, but in 2027 we'll start to see those offers come out that feature those provisions within the settlement. So for 2028, patient out of pocket costs may not exceed the net costs. Um, trumbrx purchases will also need to count towards member cost share. This is interesting. And the settlement even agree admits this. Um, this will not be possible unless direct to consumer purchases are exempt from the calculation of Medicaid best price. So we'll have to wait and see on that piece. There's not entirely a bunch of certainty at that point. And then finally for 2028, PBM compensation must be delinked from the list price of the drug. Um, and I know that this concept of delinking is something that we've discussed on um, previous podcasts. Mike, why don't you remind uh, the audience what we mean by delinking.
Speaker B: Yeah, so today most PBMs are compensated through their Group Purchasing Organizations or GPOs, based on a percentage of the list price of brand drugs that they contract with the manufacturers for uh, rebates. And so opponents uh, of that model say that that creates a perverse incentive or a conflict of interest to the PBM to prefer high risk price drugs. And so the whole idea behind delinking is instead of a percentage of the list price, you translate that into some sort of, remember per month fee, a flat fee or some other type of per occurrence fee in order to really eliminate uh, that incentive to prefer high list price drugs. So that's what delinking is all about. But there is more to the standard offering. So let's jump into what, what else is in there.
Speaker A: Yep, we talked about 2028. Let's talk about the pieces that take effect in 2029. In 2029 standard offers will not include spread pricing. There will be no rebate guarantees and um, point of sale rebates will be incorporated into that offering as well as cost plus reimbursement for retail community pharmacies and the language that it uses is acquisition cost, actual acquisition costs, um, versus some of the benchmarking you may see like NADAC and some of the state laws.
Speaker B: Yeah, I don't necessarily like the whole point of sale rebate language that's in this settlement. I think that's a requirement more so that will impact employers and plan sponsors versus the PBMs. The employers and plan sponsors will be the ones that pick up the tab for point of sale rebates. And ultimately employers and plain sponsors will simply adjust deductibles, adjust premiums, adjust max out of pockets. So the whole idea that you know, clients are going to save so many billions of dollars uh, by this is, is Washington funny math? Uh, and we, we know ah, Washington's not very good at math, so. Or PPM or PGM sometimes.
Speaker A: So uh, plan sponsors aren't picking up on this. So we sent out a template, uh, or a, an update to clients and there were several responses that came back particularly concerned about the point of sale rebate.
Speaker B: Yeah, well, and they should be because I mean it will impact the math equation that lane sponsors use to set. You know, what is the premium, what's the deductible, what's the max out of pocket? Uh, and at the same time as we head into 2027, you're going to have some very highly rebatable drugs actually lowering their list price. So think Ozempic, think wegovy. And so you, you have multiple pieces changing along the way. So ah, a lot to think about from a ah, plan sponsor perspective. Um, but that's, you know, that's a little bit further down the road. The other thing that I don't necessarily uh, like about the FTC settlement is the definition of rebates. And it actually differs, it's, it's much looser uh, than the definition in the Consolidated Appropriations act or even in some of the state legislation that's, that's been passed. Mhm.
Speaker A: Yeah. We should probably talk about how the FTC settlements and the CAA requirements relate and differ from each other.
Speaker B: Absolutely.
Speaker A: This time is as good as any. Right?
Speaker B: As good as any. Go right, go right ahead, Madison.
Speaker A: Yep. And under the CAA there's the requirement for PBMs to pass through 100% of all rebates, fees and other remuneration that it receives from drug manufacturers. And then the FTC is then again encouraging the adoption of a point of sale rebate model. Uh, it is complicated because we're at this time, at this point of time where there are several different branches of the government trying to enact policy and change in the PBM industry. And they're doing it in different ways, and some of the ways are a bit inconsistent with each other. So as we look to 2028, when some of these pieces will be implemented, it'll be very important to look at the actual definitions of rebates to determine how do these harmonize or conflict with each other. And it's going to present some challenges from a compliance perspective moving forward.
Speaker B: Absolutely. But I, I think the one thing that we need to make sure that we emphasize is that there isn't anything in this settlement that will impact clients for 2027. Nothing that will impact the pricing, nothing that will impact land design heading into 2027.
Speaker A: There is some confusing language throughout the settlement that has an effective date of 1127, but what they mean there is that these pieces of the standard offering will be incorporated into bids beginning in the 2027 calendar year for effective dates in 2028. Yeah, so that, that's the confusion there.
Speaker B: Absolutely. So, thinking forward to 2028 and what our contracting strategy is going to be, that's, that's one of the, one of the things we wanted to just wrap up this episode talking about. And I think as we look back at our contract, at least we've always had options. So whether it's been needing a pass through deal versus a traditional deal, we have both options needing exclusive specialty versus open specialty, which is in a lot of the state laws, we have that option. We even have the option to carve out specialty altogether. So having all of these different options, traditional rebates and point of sale rebates, having all of these options has always been something that's been part of our contract. And so there's nothing in the settlement that necessarily gives me pause. Uh, from a contracting perspective, as we go into, uh, 2028, what we will be focused on more so are some of the changes that you mentioned in the Consolidated Appropriations Act. Uh, uh, that will certainly change the way that we negotiate for rebates. Certainly that change the way that we negotiate for retail discounts. Particularly the, I should say the state legislation impacts the way that we'll negotiate for retail discounts because so many of them have some type of minimum reimbursement requirement, uh, and those don't apply towards guarantees. So, uh, you lose out on the ability to negotiate for, for those. And the last thing is we're focused much more on these new pricing models that are coming out of the PBMs and in the case of CDS, uh, true cost, which was specifically, uh, excluded from. From this settlement.
Speaker A: So true cost will always be allowed according to the settlement.
Speaker B: Yep.
Speaker A: Yep. Before we wrap this up, Mike, I do have one final question for you. Putting your, um, FTC commissioner hat on, what did they miss?
Speaker B: Yeah, well, uh, how much time do we have?
Speaker A: Not very much.
Speaker B: Not very much. Um, maybe that's a topic for another episode. But, uh, you know, it's funny. We talked at the beginning about waiting for this to come out, and as all these other changes have been happening across the marketplace, when this did come out, I read it, it was like, wah, wah, wah. I'm not sure that there was a lot in here that got me excited. Uh, I think their biggest mess is the rebate piece of it. Uh, and not including manufacturer administrative fees, not including some of the other types of manufacturer revenue in the definition of rebates, that's the big mess. But we'll save the rest for a future episode. And maybe, maybe President Trump wants to appoint me as a, uh, FTC commissioner for PBM reform.
Speaker A: They might have some openings. Um, and as we look forward, you mentioned some of the CAA definitions. We're going to continue to monitor any implementing rules for the caa, how that impacts rebate contracting moving forward. And certainly this is something that is going to change quite a bit over the next two years. So we'll continue to provide updates and. And, um, break things down along the way.
Speaker B: Absolutely. And we've already had a lot of conversations with different consulting firms on some of the changes that are happening. Clients always have questions, always feel free to reach out. And if you have a specific topic that you want us to cover, uh, in a future episode, always happy to do that as well. I think that does it, uh, for this one.
Speaker A: I think so. Thank you so much,
Speaker B: Sam.
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