Cigna to move away from rebates in drug plans
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Cigna on Monday announced a new drug-pricing arrangement in which discounts it negotiates with manufacturers will be passed on directly to patients at the pharmacy counter instead of shared with employers.
Why it matters: The move comes amid intensifying pressure on drug price negotiators known as pharmacy benefit managers (PBMs) over a rebate system that's been criticized for being opaque and driving up drug costs.
Driving the news: Cigna said it is launching the rebate-free model through its Evernorth division and PBM Express Scripts starting in 2027, estimating it will cut monthly prescription drug prices by an average of 30% for those who pay full cost.
- The insurer said it's also rolling out a tool to allow patients to obtain the lowest price for a drug when the cash price is lower than the copay using insurance.
- There is also a new model for paying pharmacies that the company said would support community pharmacies.
What they're saying: The model will deliver "lower costs for Americans, real-time transparency for employers and renewed trust in pharmacy benefits for all," said Adam Kautzner, president of Express Scripts.
Between the lines: The flip side is that premiums could rise, since employers who now get the rebates would no longer be able to use those funds to lower premiums.
- "We can do this without raising overall premiums by simplifying the complex system through which Americans get their medications," an Evernorth spokesperson told Axios.
What's next: The company said the new model will take effect for Cigna's fully insured patients in 2027, and become the standard model for all Evernorth pharmacy benefit clients in 2028.
- The spokesperson said employers can still choose the old model but added "we believe there is demand for our new model," which will lead to better medication adherence, member satisfaction and "trust in the health care system."
