Cigna, one of the leading health insurers in the nation, recently announced a significant change in its prescription drug rebate policy. According to a report by Bloomberg, Cigna will be eliminating prescription drug rebates in its fully insured commercial health plans by 2027. This move is expected to benefit patients, especially those in high deductible plans, by reducing their out-of-pocket costs at the pharmacy.
The new policy, which will be implemented through Cigna’s health services division, Evernorth, aims to provide transparent and rebate-free pharmacy benefit services to Americans. Instead of relying on rebates from drug manufacturers to lower costs, Cigna will negotiate discounts upfront with pharmaceutical companies. This could result in lower prices for patients when they pick up their prescriptions at the pharmacy counter.
Prescription drug rebates have long been a controversial topic in the healthcare industry, with critics arguing that they contribute to higher list prices and increase patients’ out-of-pocket costs. By eliminating rebates and offering point-of-sale discounts, Cigna hopes to address these concerns and provide patients with the lowest possible cost for their medications.
Under the new model, Evernorth will compare pricing options and charge patients the lowest cost available, whether it’s the pharmacy’s cash price, the manufacturer’s direct-to-consumer price, or the copay based on the net price. This approach ensures that patients in high-deductible health plans, in particular, will benefit from lower out-of-pocket costs during the deductible phase of their prescription drug benefit.
Cigna projects that the new policy will reduce the monthly cost for a brand-name prescription by an average of 30%. Initially, the rebate-free model will apply to around two million members of Cigna’s fully insured plans in 2027, with plans to expand to all Evernorth pharmacy benefits clients by 2028.
While this is not the first time a large insurer has proposed a rebate-free model, previous initiatives have not gained widespread adoption among clients. Plan sponsors, who ultimately dictate the direction of pharmacy benefit managers like Cigna, have grown accustomed to the traditional rebate system as a way to lower costs and control premium growth for their enrollees.
It remains to be seen whether plan sponsors will embrace Cigna’s new model en masse. Cigna is optimistic, projecting that 50% of their pharmacy benefits customers will adopt the new offering by the end of 2028. The success of this initiative will depend on how well it resonates with plan sponsors and patients alike.
