What's Happening?
Cigna has reached a settlement with the Federal Trade Commission (FTC) regarding allegations that its pharmacy benefit manager, Express Scripts, inflated insulin prices through anti-competitive rebate tactics. As part of the settlement, Cigna will eliminate spread pricing, relocate its Ascent Health Services to the U.S., and link patient costs to net prices by 2027. This agreement is expected to provide $7 billion in out-of-pocket cost relief over the next decade for Cigna's 100 million customers, primarily through lower insulin prices and reduced costs for branded medications.
Why It's Important?
The settlement with the FTC is significant as it addresses rising healthcare costs, particularly for insulin, which has been a major concern for consumers. By linking
out-of-pocket expenses to net prices, Cigna aims to provide more transparent and affordable pricing for medications. This move could set a precedent for other insurers and pharmacy benefit managers, potentially leading to broader industry reforms. The settlement also highlights the FTC's role in regulating and ensuring fair practices in the healthcare market, which could lead to increased scrutiny of similar practices by other companies.
What's Next?
Cigna will be under FTC monitoring for the next 10 years to ensure compliance with the settlement terms. The company will need to implement changes to its pricing strategies and operations to align with the new requirements. This could involve significant adjustments in how Cigna manages its pharmacy benefit services and interacts with drug manufacturers. The healthcare industry will be watching closely to see how these changes impact pricing and consumer costs, and whether similar actions will be taken against other companies.
