(Reuters) -Cigna Group said on Monday it will eliminate prescription drug rebates in many of its commercial health plans in 2027, and offer up-front discounts at its pharmacy counters to lower costs for patients.
The move cuts out the complex post-purchase rebate arrangement it had with pharmacy benefit managers, or PBMs.
President Donald Trump has called out the PBMs and said he would cut them out, as part of the government’s goal to bring drug prices in the U.S. in line with other countries.
Drugmakers pay rebates to PBMs after a prescription is filled, typically in exchange for favorable placement on the health plan’s list of covered drugs. They act as middlemen between drug companies and consumers. The pharmaceutical industry has blamed PBMs for high drug prices, saying the aftermarket discounts and fees add hidden costs to prices. Cigna’s Express Scripts, CVS Health’s Caremark unit and UnitedHealth Group Optum Rx are the three biggest PBMs. The discounts negotiated with drug companies will be available upfront to Americans buying their medications, Cigna said.
“While pharmacy benefit managers have already helped the U.S. achieve the lowest prices for generics in the world – which account for 90% of all prescriptions – the cost of brand-name medicines remain out of reach for too many Americans,” said CEO David Cordani. The new model will reduce the monthly cost for a brand-name prescription by an average of 30%, for those who pay the full cost of medications, including millions of people with high-deductible plans. The company is also adopting a new reimbursement model, to be implemented across all in-network pharmacies starting in 2026, which will compensate based on patients’ cost for medications plus a dispensing fee and additional reimbursements.
(Reporting by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)
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