🔒Cigna posts strong earnings as FTC lawsuit settlement announced

The Federal Trade Commission (FTC) on Wednesday announced a settlement with Express Scripts Inc., one of the nation’s largest pharmacy benefit managers (PBMs), requiring sweeping changes to its business practices after the agency accused the company of inflating insulin prices through anticompetitive conduct. The agreement resolves an FTC lawsuit alleging that Express Scripts, a subsidiary of Evernorth Health Services, which is owned by The Cigna Group, and its affiliated entities used rebating practices that drove up the list prices of insulin and other drugs while limiting access to lower-priced alternatives. The agency claimed those practices shifted higher costs onto patients whose copays and coinsurance are tied to list prices and particularly affected people with chronic conditions who rely on insulin. Under the proposed consent order, Express Scripts must stop favoring higher-priced versions of drugs over identical lower-cost alternatives on its standard formularies. The company is also required to offer health plans new options that base patients’ out-of-pocket costs on a drug’s net price rather than its list price. The FTC estimates that change could reduce insulin spending by as much as $7 billion over the next decade. Cigna officials did not respond to a request for comment. The announcement of the settlement was followed on Thursday by a strong fourth-quarter and year-end earnings report from The Cigna Group that reinforced the Bloomfield-based insurer’s pivot toward pharmacy benefit management and specialty care. Cigna reported $274.9 billion in total revenue for 2025, up 11% from 2024, driven largely by growth in its Evernorth Health Services division, particularly specialty pharmacy. Overall 2025 profits were $5.9 billion, or $22.18 cents a share. Fourth-quarter results were mixed, as shareholders’ net income fell year over year, but adjusted operating income jumped 16%, reflecting stronger underlying performance once one-time items are excluded. Evernorth again emerged as Cigna’s primary growth engine, posting adjusted revenues increased 16% in 2025, with especially strong gains in specialty and care services, where pre-tax operating income rose 8% for the year. Evernorth manages prescription drug benefits for insurers and employers and distributes specialty medications used to treat complex and high-cost conditions. Pharmacy benefit services posted double-digit revenue growth but slightly lower margins due to strategic investments, signaling continued spending to support scale and client retention. The FTC settlement is part of a broader federal enforcement action targeting major PBMs, including CVS Caremark and OptumRx. The agency alleges PBMs created a system that encouraged drug manufacturers to compete for formulary placement based on rebate size instead of lower net prices, allowing PBMs to retain a share of inflated rebates while patients paid more at the pharmacy counter. In addition to changes affecting drug pricing, Express Scripts must expand access to its Patient Assurance Program for insulin when participating plans include covered insulin products, unless a plan sponsor opts out in writing. It also must offer plan sponsors the ability to move away from rebate guarantees and so-called “spread pricing,” a practice in which PBMs charge plans more than they reimburse pharmacies. The agreement requires increased transparency, including mandatory drug-level reporting for plan sponsors, disclosures needed to comply with federal price transparency rules and reporting of payments made to brokers representing health plans. Express Scripts must also overhaul its reimbursement model for retail community pharmacies, transitioning to payments based on a pharmacy’s actual drug acquisition cost plus dispensing fees and additional compensation for certain services. As part of the settlement, Express Scripts agreed to relocate its group purchasing organization, Ascent, from Switzerland to the United States, which will shift hundreds of billions of dollars in purchasing activity back to the U.S. over the duration of the order. The public will have 30 days to submit comments before the commission decides whether to finalize the settlement.