The Federal Trade Commission announced on February 4, 2026 a 10-year consent decree with Express Scripts requiring the PBM to offer all plan sponsors a “standard offering” that eliminates spread pricing and bases member out-of-pocket costs on net drug prices rather than inflated list prices. Most behavioral remedies take effect January 1, 2027, with rebate transparency and spread pricing elimination requirements following by January 1, 2028.
The decree also requires Express Scripts to stop preferring high-list-price versions of a drug over lower-cost equivalents on its standard formularies. Administrative fees can no longer be tied directly or indirectly to a drug’s list price. An independent monitor will oversee compliance for the first three years.
Adoption of the standard offering is optional. Each self-funded plan sponsor must affirmatively elect it.
Who It Affects
Self-funded employers, public entities, and Taft-Hartley plans that use Express Scripts as their PBM. Self-funded plan sponsors entering mid-year renewals or beginning 2027 planning cycles need to evaluate the standard offering now.
The optional structure also creates an ERISA fiduciary decision point. Plan sponsors who do not review the standard offering may face questions from fiduciary counsel about whether they fulfilled their duty to evaluate plan costs, particularly given the simultaneous arrival of the CAA 2026 rebate pass-through mandate and the DOL’s proposed PBM transparency rule.
The Reserve Mechanism
Spread pricing inflates the gross cost per prescription charged to the plan above the net cost the PBM pays the pharmacy. From working with self-funded plan sponsors on pharmacy cost projections, spread pricing typically adds 3 to 8 percentage points to the gross pharmacy cost that flows through the plan’s claims data. That means the pharmacy IBNR your actuary calculates from that data may already include a built-in spread component.
Adopting the standard offering would lower per-claim pharmacy costs, reduce expected claim run rates, and compress the pharmacy portion of the plan’s expected claim ratio. Plans currently accruing pharmacy IBNR based on spread-inclusive pricing would need to adjust their completion factors and expected loss ratios once they elect the spread-free option.
Stop-loss attachment points also warrant review. If your specific stop-loss attachment was set using historical claims data that included spread, the attachment point may be overstated relative to the net-cost claims you would see under the standard offering. That creates room to negotiate a lower attachment or, at minimum, to confirm your stop-loss carrier’s pricing reflects the new cost basis.
Three Federal Actions Converge
The consent decree does not land in isolation. The CAA 2026 rebate pass-through mandate applies to contracts entered or renewed on or after August 3, 2028 (calendar-year plans feel it January 1, 2029). The DOL’s proposed PBM transparency rule, if finalized on schedule, takes effect for plan years beginning on or after July 1, 2026. Together, these three federal actions compress the economics of traditional PBM arrangements from three directions: spread (FTC), rebates (CAA), and fee disclosure (DOL).
For plan sponsors running multi-year pharmacy cost projections, the trend assumptions baked into 2024 and 2025 data may not carry forward.
What This Means for Your Next Review
Before your next reserve study or stop-loss renewal, confirm whether your pharmacy claims data reflects spread-inclusive or net pricing. If you adopt the Express Scripts standard offering, flag the change for your actuary so completion factors and expected claim ratios reflect the lower per-claim cost basis. Ask your stop-loss carrier whether the attachment point will be recalculated under net pricing. And put the January 1, 2027, election deadline on your benefits committee agenda alongside the CAA 2028 and DOL 2026 compliance timelines.