A major shift in pharmacy reimbursement practices is underway as Optum Rx, one of the nation’s largest pharmacy benefit managers (PBMs), announces its transition to a cost-based payment model. The change, which will be fully implemented by early 2028, is expected to result in higher payments to pharmacies for brand-name medications while reducing compensation for generic drugs.
The move comes amid growing criticism of current pharmacy payment systems and follows similar initiatives by other industry giants like CVS Health and Express Scripts. Under the new structure, pharmacies should experience more predictable revenue streams and enhanced ability to maintain drug inventories, ultimately benefiting consumer access to medications.
The transformation carries significant weight in the pharmaceutical landscape, given Optum Rx’s substantial market presence. The UnitedHealth-owned PBM currently oversees $178 billion in
pharmaceutical spending and serves more than 61 million individuals, according to company records.
While pharmacy organizations have expressed cautious optimism about the announcement, they emphasize that the impact will depend heavily on specific implementation details. The National Community Pharmacists Association noted that while such changes could represent positive progress, previous PBM initiatives have sometimes served more as public relations exercises than meaningful reforms.
When questioned about the specifics of the new model, an Optum Rx spokesperson indicated that their approach would incorporate various market indices and data points to determine drug reimbursement rates. The company expects the changes to promote long-term financial stability for network pharmacies, though individual medications may see varying reimbursement adjustments.
The announcement arrives at a critical time for the pharmacy sector, which has faced significant challenges in recent years. Major chains have undergone substantial changes, with CVS closing hundreds of locations, Rite Aid filing for bankruptcy, and Walgreens pursuing privatization. The industry upheaval has contributed to growing concerns about pharmacy access, with research indicating that approximately 15.8 million Americans currently live in areas lacking convenient pharmacy services.
The reimbursement reform represents part of a broader series of changes at Optum Rx, which recently announced plans to reduce prior authorization requirements for numerous medications and committed to complete transparency in passing through manufacturer rebates to customers. These initiatives come as PBMs face increasing scrutiny from lawmakers and regulators regarding their role in drug pricing and market dynamics.
Despite mounting pressure for PBM reform, including ongoing Federal Trade Commission litigation and various legislative proposals, concrete regulatory changes have yet to materialize. In response, major PBMs are implementing voluntary reforms to address industry concerns.
The transition to cost-based reimbursement typically involves paying pharmacies the acquisition cost of medications plus a defined markup and potentially additional dispensing fees. However, Optum Rx has not yet disclosed specific details about how these components will be structured in their model.
This shift in reimbursement strategy reflects broader industry recognition of the challenges facing pharmacies, particularly the unsustainable practice of relying on higher margins from certain medications to offset losses on others. As branded drugs become increasingly expensive, this traditional balancing act has become more difficult to maintain.
The success of this initiative will likely depend on its specific implementation and the extent to which it addresses long-standing concerns about pharmacy sustainability while maintaining
cost-effective drug access for consumers. As the rollout progresses through 2028, stakeholders across the healthcare spectrum will be watching closely to assess its impact on pharmacy operations and patient care.