WASHINGTON, DC – Insurance Watchdog Coalition (IWC) today thanked Energy and Commerce Committee members for continuing their efforts to confront rising healthcare costs for American taxpayers and urged Congress to build on recent momentum by advancing additional policies that crack down on the self-serving, profit-driven practices of health insurance corporations and their affiliated pharmacy benefit managers (PBMs). For too long, these vertically integrated giants have prioritized revenue and market control over patients and payers—using their position to extract profits, steer care and drive up costs across the healthcare system.
In a letter submitted for the record to the House Energy and Commerce Committee, IWC highlighted structural payment and pricing practices in the drug supply chain that increase costs for taxpayers, American employers and government healthcare programs alike.
These include:
- Vertical integration and self-dealing among insurers and their subsidiaries
- Waste, fraud, and abuse mechanisms such as spread pricing and improper payments
- Upcoding to increase federal payments by making Medicare patients look sicker than they are
- Offshoring GPO rebating functions that erode oversight and accountability
- Percentage-based fee models that enable intermediaries to profit from higher prices
- Rebate and shell-game arrangements that obscure true net costs
In just one federal program—Medicare Advantage—overpayments to insurers are projected to total approximately $1.2 trillion over the next decade.
While recent passage of the Consolidated Appropriations Act of 2026 is a positive step, insurers are already adjusting business practices to preserve revenue streams and offset new reforms.
According to a recent IWC poll, a strong majority of Americans (63%) want Congress to address insurance reform in this year’s health debate. Further, the poll showed that more than 90% agree with reforms that would increase transparency in costs and claim denials, prevent insurance companies from marking up prescription drug costs and give more control to patients and their doctors.
“The prescription drug supply chain is supposed to make medicines accessible and affordable — not create barriers and drive prices higher,” said Mark Merritt, Executive Director of the Insurance Watchdog Coalition. “Congress must dismantle practices that allow corporate insurers and their PBMs to inflate costs without improving affordability or access to patient care.”
IWC also applauded initiatives such as TrumpRx and Mark Cuban’s Cost Plus Drug Company, which demonstrate that removing unnecessary intermediaries can deliver measurable savings directly to consumers.
February 5, 2026
Insurance Watchdog Coalition Congratulates Trump Administration on Landmark
FTC Settlement with Express Scripts
Curbing PBM Practices that Increase Prescription Drug Costs
WASHINGTON, DC – Insurance Watchdog Coalition (IWC) today congratulated President Trump and the Federal Trade Commission for securing a landmark settlement with Express Scripts, one of America’s largest pharmacy benefit managers (PBMs). It resolves the FTC’s lawsuit alleging anticompetitive and unfair rebating practices that artificially inflated insulin prices and reduced access to lower-cost options.
Starting in 2028, the settlement will change the following at Express Scripts:
- Decouple PBM compensation from list prices of prescription drugs;
- End the practice of preferring high-list-price drugs when lower-cost equivalents exist;
- Require point-of-sale rebates to be passed directly to patients;
- Provide covered access to direct-to-consumer pricing via TrumpRx, with patient payments counting toward deductibles and out-of-pocket maximums;
- Shift to cost-plus reimbursement for retail pharmacies;
- Increase transparency in drug costs and spending;
- Move its Group Purchasing Organization (GPO) from Switzerland to the United States.
- If the other two large PBMs – CVS and Optum – also settle, it will fundamentally curb industry practices that enrich the corporate insurers owning the PBMs.
As the FTC oversees implementation of these changes, it should be vigilant to ensure insurers don’t continue abusive PBM business practices under the umbrella of the GPO, which performs many of the same functions.
“This will curb PBM shell games that cost patients, employers and taxpayers billions. Now Congress must address broader insurance practices that raise prescription drug costs—like excessive prior authorizations, unfair denials, and high out-of-pocket costs. These make insured patients choose between paying full price and forgoing the medications they need,” said Mark Merritt, executive director of IWC.
The settlement comes on the heels of the Consolidated Appropriations Act, which de-links PBM profits from drug list prices in Medicare Part D, requires 100% pass-through of rebates and opens Part D networks to more community pharmacies – steps we strongly support.