Cigna to drop prescription drug rebates for 2027 plan year

Cigna will get rid of prescription drug rebates for several of its commercial health plans in 2027, in a move that will reduce the role of pharmacy benefit managers, the company has announced.

Instead, the payer will offer up-front discounts at the pharmacy counter, which Cigna said will better reduce costs for patients.

Pharmacy benefit managers (PBMs) are middlemen that issue post-purchase rebates for certain prescriptions, usually in exchange for more favorable placement on a payer's drug formulary. PBM critics have stated that, although they have been influential in drug pricing and formularies, they can also often lead to higher drug list prices.

According to Cigna CEO David Cordani, PBMs and the prescription drug rebates they offer have yet to make a dent in costs for name-brand drugs.

"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," Cordani explained.

Cigna estimates that its new model will reduce monthly name-brand prescription drug prices by an average of 30% for those who pay the full cost of medications.

Additionally, Cigna announced that it will adopt a new reimbursement model for all in-network pharmacies starting in 2026. The model will reimburse based on the patient's cost for medications plus a dispensing fee and additional reimbursements, the payer said.

This news, first reported by Bloomberg, is salient as the Trump Administration sets its sights on prescription drug costs. In addition to launching TrumpRx, the President has expressed interest in reducing the role of PBMs.

Sara Heath has reported news related to patient engagement and health equity since 2015.