"Cigna Group will eliminate prescription drug rebates in many of its commercial health plans in 2027, upending an opaque, controversial practice that's drawn the ire of President Donald Trump. The insurer will expand the rebate-free model to clients of its pharmacy benefits business starting in 2028. The plan to eventually phase out rebates more broadly portends a seismic shift in the flow of billions of dollars among drugmakers, insurers and employers."
"Cigna said it aims to lower patients' costs at the pharmacy counter with up-front discounts rather than rebates collected from drugmakers long after a medication is dispensed. The company, which has faced criticism over rebates for years, said it's responding to changes in the marketplace, including the Trump administration's efforts to lower prices in the U.S. The dynamic has changed in terms of where the market is headed."
"That system has long relied on rebates payments drugmakers make to the PBM after a prescription is filled. The value of drug rebates and other discounts reached $356 billion last year, according to researcher Drug Channels Institute. Pharmaceutical companies pay the rebates in order to get favorable placement on PBMs' lists of covered drugs, a practice that critics have likened to kickbacks."
Cigna will eliminate prescription drug rebates in many commercial health plans starting in 2027 and expand the rebate-free model to its pharmacy benefits clients beginning in 2028. The company plans to replace rebates with up-front discounts at the pharmacy counter to lower patients' out-of-pocket costs. Executives cite marketplace changes and federal efforts to lower U.S. drug prices. Pharmacy benefit managers negotiate rebates from drugmakers for preferred formulary placement. Rebates and discounts totaled about $356 billion last year. Critics liken rebate-driven placement to kickbacks; drugmakers say patients don't see rebate benefits, while PBMs say most rebate money is returned to clients to lower premiums.
Read at www.bloomberg.com
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