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Cigna's health services division Evernorth is ending drug rebates for all of its fully insured plan customers beginning in 2027.
Instead, the discounted price negotiated between Evernorth's pharmacy benefit manager Express Scripts and drug manufacturers will go directly to consumers.
Evernorth said it is ensuring the lowest-available cost for both brand-name and generic medicines. Out-of-pocket costs will count toward the annual deductible.
Medicare and Medicaid drug plans are exempted.
For those who pay the full cost of medications, the new model will reduce the monthly cost for brand-name prescriptions by an average of 30%, Cigna said.
Customers will also have the option to pay Evernorth's negotiated cost rather than the drug company's list price if a prescribed brand-name medicine is not covered by their health plan.
Starting in 2028, the new model will also become standard for all Evernorth pharmacy benefits clients. This means a more direct path for procuring medications for their benefit plans, Cigna said. It also gives more real-time visibility into their drug costs.
Under the current model, rebates are paid by pharmaceutical manufacturers to PBMs to have their drugs placed on preferred tiers on a health plan's formulary. The rebates are passed to clients, such as employers, though the privacy of these contracts thwarts price transparency.
WHY THIS MATTERS
Cigna said the rebate-free pharmacy benefit model would lower costs, improve transparency and support local pharmacies.
"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. We applaud President Trump and his administration for taking decisive action to help lower costs for brand-name medicines that have long been controlled by drug companies," said David M. Cordani, chairman and CEO of The Cigna Group.
THE LARGER TREND
The changes come as President Donald Trump has opposed PBMs. In a speech in December 2024, Trump said, "We are going to knock out the middleman," according to Seeking Alpha.
The Trump administration has set up most-favored-nation pricing for prescriptions to lower the price of drugs for Americans. Several large drugmakers, including Pfizer and AstraZeneca, have made deals to sell drugs directly to consumers through the TrumpRx website.
Evernorth said it plans to integrate its model with the new direct-to-patient programs when they become available.
Email the writer: SMorse@himss.org