Major pharmacy benefit manager Optum Rx announced Thursday it will implement a new cost-based reimbursement system for pharmacies, marking a significant shift in how drug stores are compensated for medications. The change is expected to increase payments for brand-name drugs while reducing reimbursements for generic
medications.
The transition, which will affect Optum Rx’s network serving over 61 million people, is scheduled to be fully implemented by early 2028. The company has already begun moving employer and health plan clients to the new payment structure.
Under the current system, pharmacies face complex reimbursement calculations that often result in payments below their costs for acquiring and dispensing medications. Many pharmacies have
traditionally relied on higher margins from certain drugs to offset losses on others, a practice that has become increasingly difficult to sustain.
The new cost-based model aims to provide more predictable revenue streams for pharmacies and improve their ability to maintain adequate drug inventories. When asked about specific details, an Optum Rx spokesperson indicated the approach would incorporate various market indices and data points to determine reimbursement rates.
This move follows similar initiatives by other major PBMs, including CVS Health’s 2023 announcement of a cost-based model and Express Scripts’ offering of a comparable pricing option. These changes come amid mounting criticism of PBMs’ role in drug pricing and their impact on pharmacy operations.
While pharmacy groups have cautiously welcomed the announcement, they emphasize that the effectiveness of the new model will depend on its specific implementation. The National Community Pharmacists
Association noted that previous PBM initiatives have sometimes served more as public relations measures than meaningful reforms.
The reimbursement pressures on pharmacies have led to significant industry upheaval, with major chains like CVS closing hundreds of locations, Rite Aid filing for bankruptcy, and Walgreens pursuing privatization. The situation has contributed to the creation of pharmacy deserts, with approximately 15.8 million Americans lacking convenient access to pharmacy services.
Optum Rx, which managed $178 billion in pharmaceutical spending last year, maintains that the new model will help promote long-term financial stability for network pharmacies, though payment adjustments will vary by medication. The company has not specified whether the changes will result in higher overall payments to pharmacies or how they will affect the PBM’s financial performance.
The announcement comes amid increasing scrutiny of PBMs by lawmakers and regulators, including ongoing litigation from the Federal Trade Commission. While comprehensive PBM reform has yet to materialize at the federal level, major industry players are making voluntary changes to address criticism.
Optum Rx’s reimbursement reform announcement coincides with other recent initiatives, including a reduction in prior authorization requirements for numerous medications and a commitment to pass through all manufacturer rebates to customers.
The pharmacy industry’s response to these changes remains measured, with stakeholders emphasizing the need for transparency in
implementation. The success of this reimbursement reform will likely depend on specific details of the program and its actual impact on pharmacy operations and financial stability.
The transition represents another significant development in the ongoing evolution of pharmaceutical pricing and distribution systems, as industry players attempt to address concerns about drug costs and pharmacy sustainability while maintaining their business models.