Cigna ends drug rebates in some types of health plans

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By Sriparna Roy

(Reuters) -Cigna Group said on Monday it will eliminate prescription drug rebates in its own commercial health plans in 2027 and offer up-front discounts at its pharmacies, a shift it said would lower costs for patients.

The move may also lessen pressure from lawmakers and President Donald Trump, who has blamed these rebates for keeping drug prices high, an argument also made by the pharmaceutical industry. Trump says the rebates hinder his goal to bring drug prices in the U.S. in line with other countries.

Cigna said the change will initially apply in 2027 to about 2 million members of its fully insured plans, or those in which Cigna is responsible for the full cost of healthcare.

Most of Cigna’s insurance business is managing plans for employers and other groups that cover the medical spending. In 2028, those clients who are also using its Express Scripts pharmacy benefit manager could elect for this benefit.

Drugmakers pay rebates to pharmacy benefit managers after a prescription is filled, typically in exchange for favorable placement on the health plan’s list of covered drugs.

PBMs such as Cigna’s Express Scripts, CVS Health’s Caremark unit and UnitedHealth Group Optum Rx have faced criticism for opaque rebate structures that drugmakers say include fees that drive up prices. They have also come under fire over their insulin pricing practices.

The move 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.

“We see this move by Cigna as a positive move tailored to this political environment and existing market concerns,” Bernstein analyst Lance Wilkes 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.

(Reporting by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli and Anil D’Silva)