Medicare Part D Reforms
In early February 2026, two significant federal actions brought renewed attention to the regulation of pharmacy benefit managers (PBMs): the enactment of new Medicare Part D reforms and a settlement between the Federal Trade Commission (FTC) and Cigna’s Express Scripts.
On February 3, 2026, President Donald Trump signed a federal appropriations package that included provisions affecting PBM practices within Medicare Part D. The legislation is described as one of the most substantial federal PBM reforms in recent decades and introduces new standards related to contract terms, transparency and compensation structures.
Under the new law, the Centers for Medicare & Medicaid Services (CMS) is directed to define and enforce “reasonable and relevant” contract terms for Medicare Part D plans. The legislation strengthens CMS oversight authority and requires greater transparency regarding pharmacy payment methodologies and network participation standards. It also establishes a designation for “essential retail pharmacies,” intended to help ensure beneficiary access to pharmacy services.
In addition, the law prohibits PBM compensation in Medicare Part D from being tied to a drug manufacturer’s list price. This change is intended to alter the structure under which PBMs are paid in the federal program. The legislation also includes reporting and accountability measures aimed at increasing clarity around reimbursement practices and contractual requirements affecting pharmacies that participate in Part D networks.
Settlement with Cigna’s Express Scripts
The following day, on February 4, 2026, the FTC announced a settlement with Cigna related to business practices of its PBM subsidiary, Express Scripts. The agreement follows a period of regulatory scrutiny focused on pricing structures and competitive practices within the PBM market.
As part of the settlement, Express Scripts agreed to eliminate spread pricing in its commercial business. Spread pricing occurs when a PBM charges a health plan more for a prescription drug than it reimburses the dispensing pharmacy, retaining the difference. The company also agreed to decouple certain rebates and fees from drug list prices, changing how compensation is structured between PBMs and manufacturers.
The agreement includes a requirement for Express Scripts to implement a cost-plus reimbursement model for certain independent pharmacies, specifically those operating three or fewer locations, in its commercial plans beginning as early as 2027. Under a cost-plus model, pharmacies are reimbursed based on the acquisition cost of a medication plus a defined dispensing fee.
Additionally, Cigna agreed to relocate its group purchasing organization, Ascent Health Services, from Switzerland to the United States. The settlement subjects Express Scripts to FTC monitoring for a period of 10 years to ensure compliance with the terms of the agreement.
Together, the enactment of federal Medicare Part D reforms and the FTC’s settlement with Express Scripts represent notable developments in the oversight of PBM practices. Both actions focus on reimbursement structures, transparency requirements and regulatory enforcement mechanisms within federal and commercial prescription drug programs. The changes are expected to affect PBMs, health plans, pharmacies and beneficiaries participating in these programs in the years ahead.