One of America’s largest pharmacy benefit managers announced Thursday it will implement a new payment model for pharmacies, marking a significant shift in how drug dispensers are compensated. Optum Rx’s transition to a cost-based reimbursement structure aims to provide pharmacies with more stable revenue streams and enhance their ability to maintain medication inventories.
The initiative, which will be fully implemented by early 2028, represents the latest effort by a major drug middleman to address widespread criticism of current pharmacy payment practices. Under the new system, pharmacies can expect higher compensation for branded medications while receiving lower payments for generic drugs.
The announcement comes at a crucial time for the pharmacy sector, which has faced significant financial pressures under existing reimbursement frameworks. Currently, pharmacies often operate at a loss when dispensing certain medications, forcing them to rely on higher margins from other drugs to maintain financial viability.
Optum Rx, a subsidiary of UnitedHealth that manages pharmaceutical spending for more than 61 million individuals and handled $178 billion in drug spending last year, follows similar moves by competitors CVS Health and Express Scripts in adopting cost-based pricing models.
While pharmacy organizations have cautiously welcomed the
announcement, they emphasize that the impact will depend heavily on specific implementation details. The National Community Pharmacists Association expressed measured optimism but noted past disappointments with similar PBM initiatives, suggesting the need to see concrete results before celebrating the change.
When asked for specifics, an Optum Rx representative indicated that their approach would incorporate various market indices and data points to determine drug reimbursement rates, though exact details of the markup structure remain unclear. The company expects the changes to promote long-term stability for network pharmacies, acknowledging that payment adjustments will vary by medication.
The reform comes amid significant upheaval in the pharmacy industry. Recent years have witnessed numerous pharmacy closures, including hundreds of CVS locations, Rite Aid’s bankruptcy filing, and Walgreens’ move toward private ownership. These changes have contributed to growing concerns about pharmacy access, with research indicating that approximately 15.8 million Americans currently live in areas lacking convenient pharmacy access.
The timing of Optum Rx’s announcement is particularly notable, coming just one day after the company revealed plans to reduce prior authorization requirements for numerous medications. This follows their earlier commitment to pass through all manufacturer rebates to customers, suggesting a broader strategy to address criticism of PBM practices.
These changes occur against a backdrop of increasing scrutiny from lawmakers and regulators regarding PBM operations and their impact on drug pricing. Despite ongoing investigations by the Federal Trade Commission and various legislative proposals, concrete reforms have yet to materialize at the federal level.
The pharmacy industry’s response to Optum Rx’s announcement highlights both hope and skepticism. While the move toward cost-based
reimbursement could potentially provide more predictable revenue for pharmacies, industry stakeholders emphasize that success will depend on the specific terms and implementation of the new model.
The transition to this new payment structure reflects broader industry recognition of the need to reform pharmacy compensation practices. As pharmacies continue to face financial pressures and communities grapple with reduced access to pharmacy services, the impact of such changes on the healthcare landscape remains to be seen.