On Monday, Cigna announced that it would be abandoning traditional manufacturer rebates and moving to a new, “rebate-free” approach—essentially a point-of-sale (POS) rebate model paired with a cost-plus pharmacy reimbursement framework. Here’s the press release.
Moving manufacturers’ rebates and discounts to the point of dispensing is a big win for patients, who can share in the savings that pharmacy benefit managers (PBMs) negotiate with drugmakers. It’s a practical, patient-friendly step toward shrinking the gross-to-net bubble that has inflated out-of-pocket costs for years.
Yet as always, the fine print matters. Below are three crucial considerations that reveal why this move might be less revolutionary than it first appears—and why it may not be widely adopted by plan sponsors. Perhaps these will spark some questions for Cigna’s management about the company’s increasingly opaque profit model during tomorrow’s third-quarter earning call.
This isn’t the first time that Express Scripts has tried to alter how its plan sponsors manage their pharmacy benefits. After reading the analysis below, you can decide whether this latest attempt is true reform—or the triumph of hope over experience.
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