Cigna recently announced plans to remove traditional manufacturer rebates from its commercial pharmacy benefit offerings in 2027. This new approach aims to simplify drug pricing by eliminating the complex, post-purchase rebate process and making the discounted price of a drug available upfront, at the point of sale.

Headlines highlight that moving manufacturer rebates and discounts to the point of dispensing is a big win for patients, allowing them to share in the savings that pharmacy benefit managers (PBMs) negotiate with drugmakers. Yet when you look closer, several important details make this change far less transformative for plan sponsors than it appears.

A Limited Rollout, Years Away

Cigna will begin rolling out its rebate-free model to its Evernorth fully insured pharmacy benefit membership, administered by Express Scripts, starting in 2027 and to its commercial clients in 2028. It’s important to note that fully insured lives make up a relatively small portion of Cigna’s total membership, and that this new rebate-free model is not mandatory but optional for its commercial clients.

Is This A Good Trade for Plan Sponsors?

While the idea of passing savings directly to members sounds appealing, it comes with trade-offs. Under a rebate-free model, plan sponsors would forgo the rebate dollars they currently use to manage overall program costs such as reducing premiums or monthly program charges, offsetting administrative expenses and budget shortfalls, and funding wellness initiatives, etc.

While rebates can be replaced with deeper discounts at the point of sale, this doesn’t mean they will achieve short or long-term savings to a plan sponsor. Ask yourself these questions:

• • Do you think pharmaceutical manufacturers will give 100% of the savings from the loss of rebates and apply the entirety of these savings to upfront discounts?

  • ❔Do you think manufacturers will stop increasing drug prices each year?

  • ❔Will your members benefit from any of these savings at the point of sale for those in a fixed and minimal copay structure?

A Strategic Move, But Not a Universal Solution

Cigna’s decision, along with what CVS/Caremark and Optum have presented in a similar model, should be viewed for what it is: a strategic positioning move in response to growing scrutiny of PBMs and rebates—not an across-the-board solution for drug affordability. For many employers, rebates remain an important financial tool. They help stabilize costs, fund benefit enhancements, or offset future increases in pharmacy trends. Giving up that flexibility for a short-term and potentially limited immediate member benefit at the register may not align with a plan sponsors long-term financial goals.

Cigna’s move keeps the spotlight on rebates, but it’s far from a universal fix. For now, it’s a reminder that every pricing model comes with trade-offs. Plan sponsors and their healthcare brokers must carefully evaluate which approach delivers the greatest total value for their organization and their membership.

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