Cigna Group will stop offering prescription drug rebates in many of its commercial health plans starting in 2027, Bloomberg’s John Tozzi reported on Monday, October 27. The company will extend this rebate-free approach to its pharmacy benefits clients beginning in 2028, Tozzi wrote.
This shift toward gradually eliminating rebates signals a major change in how billions of dollars circulate among drug manufacturers, insurers, and employers, Tozzi noted.
In the existing system, part of a $356 billion industry nationwide, pharmacy benefits managers (PBMs) serve as middlemen between drug manufacturers and insurers, LinkedIn News editor John Tomase explained. Once a prescription is filled, the PBM gets a rebate, which critics liken to a kickback, as it helps secure preferred drug positioning. Unlike immediate discounts, these rebates usually benefit employers and do not directly help patients.
Reuters’s Sriparna Roy wrote that 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.
“The dynamic has changed in terms of where the market is headed,” Adam Kautzner, president of Cigna’s Express Scripts pharmacy benefits division, said in an interview with Bloomberg. “We see this as an opportunity to lower the costs for Americans on branded drugs.”
Cigna's Express Scripts, CVS Health's Caremark unit and UnitedHealth Group Optum Rx are the three biggest PBMs, according to Reuters.
