CVS Health Corp. (CVS): Caremark Agrees to FTC Drug Pricing Settlement; Terms Largely Consistent with Express Scripts FTC

Research evidence excerpt

CVS Health Corp. (CVS): Caremark Agrees to FTC Drug Pricing Settlement; Terms Largely Consistent with Express Scripts FTC

Goldman Sachs CVS Health Corp. (CVS)

models in the past 2 years. Similar to the Express Scripts settlement, there are no

financial penalties, monetary damages, or disgorgement provisions associated with the

Caremark agreement, which will remain in effect for 10 years following implementation.

As of June, Optum Rx had also reached a proposed settlement with the FTC, although

final terms have not yet been disclosed (link).

CVS will report 2Q26 earnings on 8/5/26. We believe that many of the reforms

contemplated by the FTC’s consent order are broadly consistent with initiatives already

underway at Caremark and across the PBM industry, including more transparent pricing

arrangements, expanded rebate pass-through offerings, and alternatives to traditional

spread pricing models. We believe the core future value proposition that CVS laid out at

its December 2025 investor conference for Caremark’s pharmacy management services

remains intact, including negotiating discounts to drive lower net drug costs, formulary

and network design, clinical programs and services, safety and quality checks, and

claims adjudication and administration. We look for commentary from CVS regarding

implementation of the consent order and its ability to continue earning fair, durable, and

sustainable margins within its pharmacy benefit management business.

Key Details of the Settlement

n The FTC alleged that Caremark benefited from rebate-driven formulary

arrangements that favored higher-list-price drugs. The agency claimed that PBMs

encouraged manufacturers, particularly insulin manufacturers, to compete based on