In a significant shift to pharmacy reimbursement practices, Optum Rx announced Thursday it will implement a cost-based payment model that aims to provide more stable revenue for pharmacies. The change is expected to result in higher payments for branded medications and reduced reimbursements for generic drugs.
The pharmacy benefit manager (PBM), a subsidiary of UnitedHealth, has begun transitioning its employer and health plan clients to the new system, with full implementation targeted for early 2028. The move follows similar initiatives by other major PBMs, including CVS Health and Express Scripts, as the industry faces mounting pressure to reform its payment practices.
Current pharmacy reimbursement systems have been widely criticized for their complexity and unpredictability. Pharmacies often rely on higher payments for certain medications to offset losses on others, a practice that has become increasingly challenging as more expensive branded drugs enter the marketplace. Many pharmacies report being reimbursed at rates below their acquisition and dispensing costs.
While specific details about Optum Rx’s new model remain limited, a company spokesperson indicated it will incorporate multiple market indices and data points to determine drug reimbursement rates. The impact could be substantial, given that Optum Rx managed $178 billion in pharmaceutical spending for more than 61 million people last year.
Pharmacy organizations have responded to the announcement with cautious optimism. The National Community Pharmacists Association noted that while such changes could be positive, previous PBM reform announcements have sometimes served more as public relations moves than meaningful improvements. The organization emphasized that the actual impact would depend on the specific implementation details.
The reimbursement overhaul comes at a critical time for the pharmacy sector, which has experienced significant disruption in recent years. Major chains have faced challenges, with CVS closing hundreds of locations, Rite Aid declaring bankruptcy, and Walgreens pursuing privatization. Smaller independent pharmacies have also struggled, with some closing permanently. These closures have contributed to pharmacy deserts, affecting approximately 15.8 million Americans who lack convenient access to pharmacy services.
The announcement is part of a broader series of reforms by Optum Rx, including recent commitments to reduce prior authorization
requirements for numerous medications and to pass through 100% of drug manufacturer rebates to customers. These changes come as PBMs face increasing scrutiny from lawmakers and regulators, including ongoing litigation from the Federal Trade Commission.
When questioned about the financial implications of the new model, Optum Rx’s spokesperson emphasized that the changes aim to promote long-term stability for network pharmacies, acknowledging that individual pharmacies may see higher payments for some medications and lower ones for others.
The shift in reimbursement strategy reflects growing pressure on PBMs to address criticisms of their role in drug pricing. While PBMs argue that high drug prices stem from manufacturer pricing decisions, they have begun implementing internal reforms in response to calls for change from various stakeholders.
Despite numerous legislative proposals and regulatory actions targeting PBM practices, concrete reform has been limited at the federal level. This has led major PBMs to proactively announce their own changes, though the effectiveness of these voluntary measures remains to be seen. The success of Optum Rx’s new reimbursement model will likely depend on its specific implementation details and the extent to which it truly addresses the financial challenges facing modern pharmacies.