Major PBM to Pass 100% of Rebates to Consumers

1.5 minute read

Optum Rx, a pharmacy benefit manager (PBM) and subsidiary of UnitedHealth Group, plans to pass all rebate drug discounts to consumers by 2028. This move aims to enhance transparency and address prescription cost concerns.

PBMs like Optum Rx work with drug manufacturers to secure rebates, reducing medication costs for consumers. These savings are shared with insurers, unions, and plans. Optum Rx aims for 100% rebate pass-through by 2028. Currently, they are at 98%.

Optum Rx is also launching new programs to support independent pharmacies, offering higher reimbursements for drugs and aiding pharmacists in managing patients' social and chronic health needs.

PBM Reform

Optum Rx's recent move comes as federal scrutiny and bipartisan support for PBM reform increase. Critics claim that savings aren't fully passed to consumers or plan sponsors, and current practices lack transparency, raising drug costs.

UnitedHealth Group CEO Andrew Witty highlights PBMs' crucial role in reducing drug prices through manufacturer negotiations, noting that Optum Rx provides substantial annual savings.

Summary

OptumRx's announcement signals a shift towards full rebates and transparency in the industry. While smaller PBMs already pass through all rebates, larger ones may soon follow. This proactive move positions Optum Rx ahead of potential legislation that could mandate full rebate pass-through to employer-sponsored health plans.

Employers should watch for further actions from major PBMs in 2025 and stay informed on PBM reform legislation. Download the bulletin for more details.