10 months ago
Cigna to End Drug Rebates, Aiming to Lower Patient Costs
Cigna, a large health insurance company, plans to stop using a system called 'rebates' for prescription drugs.
Right now, drug companies give money back to insurance companies after people buy medicine.
Cigna wants to give discounts upfront, so people pay less when they get their prescriptions.
This change starts in 2027 for some Cigna customers and expands in 2028.
The aim is to make drug costs more transparent and potentially cheaper.
This move may shift how drug companies and insurance companies handle money.
Rebates will continue in government programs like Medicare and Medicaid for now.
Cigna will phase out prescription drug rebates in its commercial health plans, starting in 2027.
The change aims to lower patient costs with upfront discounts instead of rebates.
The policy will apply to about 2 million members initially, expanding to Express Scripts clients in 2028.
The move comes amid criticism of rebates and changes in the market.
Cigna anticipates renegotiating contracts with drugmakers.
- Who
- Cigna Group
- What
- Will eliminate prescription drug rebates in many private health plans
- Where
- US
- When
- Starting in 2027, expanding in 2028
- Why
- To lower patients’ costs and respond to market changes
PBMs/Insurers
Drugmakers
Rebates' Impact on Drug Prices
PBMs/Insurers
Rebates are passed back to clients to lower premiums, offsetting costs.
Drugmakers
Rebates lead to inflated US drug prices, with patients not seeing the full benefit.
Transparency of Drug Pricing
PBMs/Insurers
The existing rebate system is complex and not fully transparent.
Drugmakers
Drugmakers want a simpler, more transparent approach.
Key facts
- Company
- Cigna Group
- Policy Change
- Eliminating prescription drug rebates
- Initial Implementation
- 2 million Cigna members (2027)
- Expanded Implementation
- Express Scripts clients (2028)
- Impacted Programs
- Private health plans (not Medicare/Medicaid)
Quotes
Adam Kautzner
President of Cigna’s Express Scripts pharmacy benefits division
“We see this as an opportunity to lower the costs for Americans on branded drugs.”
livemint.com
“We remain confident in the long-term durability of our margin profile.”
livemint.com
