While the industry conversation has stayed focused on PBM reform legislation, something more immediate has been happening on the ground. Two of the largest PBMs in the country have moved away from traditional spread-based reimbursement and toward cost-based models. This is not a future policy discussion. It is already live in remittance advices across the country.
What Optum Rx Actually Did
All community pharmacies in Optum Rx’s network have transitioned to a cost-based reimbursement model as the PBM tries to reduce variation in how pharmacies are paid. Optum Rx first launched the model across roughly 1,400 community pharmacies in March 2025. By December 2025, the PBM had notched agreements with three additional pharmacy services administration organizations representing more than 17,000 community pharmacies, bringing the total network to 100% cost-based contracts.
Effective immediately, with full implementation by January 2028, Optum Rx aligned payment models more closely to the costs pharmacies face due to manufacturer pricing actions. This change positively impacts Optum Rx non-affiliated network pharmacies, including the more than 24,000 independent, community pharmacies the company serves.
The reasoning Optum Rx gave is itself a window into what changed. A long-established, industrywide system successfully encouraged the use of lower-cost generics, and now generics are common. In 2023, drug companies launched new U.S. drugs at prices 35% higher than the previous year, and across brand drugs, manufacturers have set list prices in the U.S. 422% higher than in other nations.
In other words, the spread pricing model was built for a generic-dominant world. The brand-name drug price environment, GLP-1s prominently included, has made that model financially unworkable for the pharmacies dispensing increasingly expensive brand products. Optum Rx’s response was to decouple reimbursement from list price dynamics entirely and tie it to actual acquisition cost plus a defined fee structure.
The broader transformation didn’t stop at pharmacy reimbursement. Optum Rx is replacing the traditional PBM model with a transparent, fee based structure for every PBM client. Under the new approach, clients are offered a pricing structure with monthly, clearly defined fees per member that are independent of manufacturers’ list prices or prescription volume, eliminating spread pricing and similar practices. By the end of 2027, group purchasing will fully transition to flat service fees.
Optum Rx has committed to eliminating spread pricing, the practice where a PBM charges a health plan more for a medication than it reimburses the pharmacy and pockets the difference. This builds on the 2025 transition to cost-based payment terms and the earlier elimination of retroactive clawback fees, intended to create a more stable and predictable financial environment for community pharmacies.
What Cigna’s Evernorth Division Announced
Cigna’s move follows a parallel logic with a different timeline structure.
Cigna is changing the way it pays community pharmacists, so reimbursement is based on the cost of medications, a dispensing fee, and reimbursement for clinical services. The rebate-free PBM model goes into effect in 2027 for Cigna’s fully insured health plan and becomes standard for all Evernorth PBM clients in 2028.
As part of the transition, Evernorth will automatically charge the lowest price for consumers at the pharmacy counter, whether that’s its own negotiated price, a cash discount, or the cost with co-pay. Evernorth plans to reimburse pharmacies based on the cost of drugs, plus a dispensing fee, and additional reimbursement for clinical services. The company already offered a cost-plus model to interested clients, but Evernorth plans to expand the arrangement across all in-network pharmacies starting in 2026.
The pharmacy reimbursement piece moves faster than the consumer-facing rebate elimination. The new reimbursement model, compensating pharmacies based on patients’ cost for medications plus a dispensing fee and additional reimbursements, will be implemented across all in-network pharmacies starting in 2026, well ahead of the 2027 and 2028 timeline for the rebate-free consumer model.
Those sequencing matters. The pharmacy-side reimbursement change is not contingent on the slower-moving fully insured and commercial client transitions. It is happening now, in 2026, across Cigna’s in-network pharmacies.
Evernorth said the approach could reduce monthly brand-name prescription costs by an average of 30% for people with high-deductible plans. As part of the shift, Evernorth will also update reimbursement for in-network pharmacies in 2026 to cover medication costs, dispensing fees, and performance-based clinical incentives.
That last phrase, performance-based clinical incentives, is worth underlining. Cigna’s model explicitly builds a clinical service component into the reimbursement formula itself, not as a separate billing category but as part of the base pharmacy payment structure.
Why Critics Remain Skeptical, and Why That Matters for Pharmacists
The framing from both PBMs presents these changes as wins for pharmacies and patients. The skepticism from independent pharmacy advocates and PBM critics is worth understanding, because it affects how pharmacists should interpret their own remittance data going forward.
Joe Shields, CEO of Transparency-Rx, an advocacy group for smaller PBMs challenging the big three, said that large PBMs have shifted their dependence on rebates to fees paid upstream instead. Alan Pannier, PharmD, MBA, senior vice president of product strategy for SmithRx, a member of Transparency-Rx, said the Cigna plan will not change misaligned business practices and that the PBM will continue to keep money from drugmakers: “They are just delinking that revenue from claims and calling them fees instead of rebates.”
A close industry analysis noted that most commercial plan sponsors use rebates to offset general healthcare costs and reduce premiums, not to directly lower patients’ pharmacy costs for the prescriptions that generated those rebates. The delay to 2028 for full client adoption presumably gives Cigna time to renegotiate contracts and persuade its clients to adopt the new model. The analysis also noted that Cigna has only about two million fully insured beneficiaries, fewer than most peer PBMs, meaning the immediate scope of the rebate-free consumer model is narrower than headlines suggest.
The skepticism centers on the consumer-facing rebate elimination, not the pharmacy reimbursement change. For pharmacists, the pharmacy-side cost-based reimbursement is real, is happening now, and is structurally different from the spread pricing model regardless of how the broader rebate question resolves. The two changes can be true simultaneously: the pharmacy reimbursement formula has genuinely changed, and the consumer savings claims may or may not materialize as advertised. Pharmacists should evaluate their own remittance data on its own terms.
Why Cost-Plus Reimbursement Creates Winners and Losers
For years, the independent pharmacy reimbursement conversation centered on fighting unpredictable, opaque spread pricing, where a pharmacy’s margin on any given prescription was effectively a black box controlled by the PBM. Cost-plus models flip that structure. The pharmacy is paid based on actual acquisition cost plus a transparent, predictable dispensing fee. In theory, this is exactly what independent pharmacy advocates have been asking for.
In practice, the transition creates winners and losers, and which side a pharmacy lands on depends entirely on how it is operationally positioned right now.
The pharmacies that win have strong generic purchasing relationships and access to favorable wholesaler or secondary wholesaler pricing. Because “cost” in a cost-plus formula is based on acquisition cost, pharmacies that buy smarter keep more of the margin. Pharmacies that have already built clinical service revenue streams are also better positioned, because cost-plus dispensing fees tend to be flat and modest. Dispensing alone, even under a fairer model, still isn’t enough to sustain a full-service pharmacy. The clinical service layer, MTM, biosimilar substitution, GLP-1 coaching, CGM programs, and the deprescribing services covered in earlier issues, becomes the actual profit engine, with dispensing providing predictable, if modest, base revenue.
The pharmacies that get squeezed have been relying on favorable spread pricing on specific high-margin generics, sometimes unknowingly. Those margins compress under a transparent cost-plus formula, since the spread that previously created that margin simply isn’t part of the new equation anymore. Pharmacies without diversified purchasing relationships, stuck with single-wholesaler primary contracts at standard pricing, find their acquisition costs become the baseline the entire reimbursement is built on. There’s no room to improve the math without renegotiating supply relationships.
The Connection to the Cost-Plus Movement Already Reshaping the Market
This newsletter has covered the cost-plus pricing wave from multiple angles this year: the TrumpRx expansion with Cost Plus Drugs and Amazon Pharmacy, and the Compass Core Pharmacy story out of Rhode Island, where a pharmacist built an entire business model around transparent cost-plus pricing for cash-pay patients.
With this transition, Optum Rx is following in the footsteps of pharmacy juggernaut CVS Health, which in 2023 announced its pharmacies would move to a cost-based model. Cigna-owned Express Scripts also offers a cost-based pricing option. Major PBMs are voluntarily changing elements of their business models amid intense regulatory and lawmaker scrutiny, client uneasiness with opaque benefits models, and competition from pharmacy upstarts like billionaire Mark Cuban’s Cost Plus Drugs.
Evernorth’s announcement is reminiscent of CVS’s introduction of TrueCost, a PBM model based on the net cost of drugs with clear administrative fees. CVS also rolled out CostVantage, a cost-based drug pricing method for its retail pharmacies, in 2024.
The pattern across CVS, Optum Rx, and Cigna’s Express Scripts is now consistent: all three of the largest PBMs in the country have moved or are moving toward cost-based reimbursement structures, in direct competitive response to the transparency pressure that cost-plus disruptors like Mark Cuban’s Cost Plus Drugs created in the broader market. The independent pharmacy that built a cost-plus cash-pay practice in 2025 anticipated a structural shift that the entire PBM industry is now following.
The Connection to PBM Reform Legislation
Optum Rx’s strategic overhaul is not happening in a vacuum. It is a direct and calculated response to a rapidly changing legal landscape. The federal Consolidated Appropriations Act, passed in February 2026, contains sweeping PBM reforms that mirror many of the changes Optum is now implementing.
This connects directly to the PBM reform coverage from earlier this year. The Consolidated Appropriations Act of 2026 required semiannual PBM reporting, 100% rebate pass-through by 2028, and bona fide service fees only. Optum Rx and Cigna’s voluntary moves toward cost-based reimbursement are, in part, PBMs getting ahead of regulatory requirements that are coming regardless. The pharmacies that understand their cost-based remittance data now will be better positioned as the remaining PBM reform provisions phase in over the next two years.
Your Action This Week
Pull your remittance data from Optum Rx and Cigna claims over the past 60 days. Compare your actual reimbursement against your acquisition cost on your top 25 dispensed generics, line by line.
If you’ve never done this exercise, you may be surprised by what you find. Some products may now reimburse better than they did under the old spread model. Others may reimburse worse, particularly the high-margin generics that previously benefited from favorable spread pricing you may not have known you were receiving. That comparison tells you exactly where to focus your next purchasing negotiation.
And if you haven’t reviewed your primary wholesaler agreement and secondary wholesaler options in the last 12 months, cost-plus reimbursement just made that review one of the highest-ROI uses of your time this quarter. Under cost-plus, your purchasing price is your margin. The pharmacy that negotiates a half-percent better acquisition cost on its top 25 generics under a cost-plus formula keeps that half-percent as profit, directly and predictably, in a way that spread pricing never made visible or actionable.
The reimbursement model independent pharmacy advocates have been asking for is arriving. Whether it helps your pharmacy or squeezes it depends on work that starts with opening your remittance data this week.
Sources: Becker’s Hospital Review (Optum Rx Updates Model for Community Pharmacy Pay, December 18, 2025), Healthcare Finance News (Optum Rx Expands Pharmacy Payment Model, December 19, 2025; Optum Rx Replaces Traditional PBM Model with Fee-Based Structure, May 12, 2026; Optum Rx Rolls Out Cost-Based Pharmacy Reimbursement Model, March 24, 2025), Healthcare Dive (Optum Rx: 100% of Network Community Pharmacies Shift to Cost-Based Model, December 18, 2025), UnitedHealth Group Newsroom (Optum Rx to Modernize Pharmacy Payment Models, March 20, 2025; Optum Rx Expands Cost-Based Pharmacy Reimbursement, December 2025), Fierce Healthcare (Optum Rx 100% Network Community Pharmacies Shift to Cost-Based Model, December 2025; Cigna’s Express Scripts Set to Shift Away From PBM Rebates, October 27, 2025), Managed Healthcare Executive (Cigna Announces Rebate-Free Pharmacy Benefit Model Starting in 2027, March 19, 2026; Optum Rx Changes How Pharmacies Are Reimbursed), Healthcare Dive (Cigna’s Express Scripts to Transition Away From Rebate Drug Model, October 27, 2025), Drug Channels (Cigna’s Rebate-Free Pharmacy Model: Three Realities Behind Its Latest Push to Pop the Gross-to-Net Bubble), MedCity News (Cigna’s Rebate-Free Model Sounds Nice, But Experts Are Still Skeptical, November 6, 2025), AHA News (Cigna Announces New Pricing Model That Would Share Negotiated Discounts With Consumers, October 28, 2025), Stock Titan / PR Newswire (Evernorth Announces New Era of Pharmacy Benefit Services to Lower Americans’ Medication Costs, October 27, 2025), AOL / Reuters (Cigna to End Drug Rebates in Many Private Health Plans in 2027), BriefGlance (Optum Rx Upends PBM Model with Full Transparency Fee Structure, May 12, 2026)