The news: Cigna will eliminate prescription drug rebates for many of its commercial health plans and instead pass on the discounted price directly to consumers beginning in 2027.

• Under the new model, consumers’ monthly brand-name drug costs will drop by an average 30%, according to Cigna Group and Evernorth.
• It plans to expand the no-rebate model to its own Evernorth Express Scripts pharmacy benefit manager (PBM) clients in 2028.

Catch up quick: Prescription rebates are discounts on brand-name drugs that pharmaceutical companies pay to PBMs after a patient fills a prescription. These rebates are paid in exchange for the drug being placed on the insurer's list of preferred covered medicines (formulary).

However, the PBM rebate system is controversial and criticized by pharma, federal and state officials, and medical and consumer groups.

• President Trump tried to get rid of manufacturer rebates paid to Medicare during his first term, and has resurfaced criticism in this second term, vowing to “knock out” PBMs.
• In June, Centers for Medicare & Medicaid Services’ administrator Dr. Mehmet Oz called for the three biggest PBMs—Cigna, CVS Health, and UnitedHealth Group—to voluntarily end the current rebate system before the federal government intervenes.
• The FTC is suing the Big 3 PBMs over allegedly artificially inflating the list price of insulin drugs.
• In April, a bipartisan group of 39 state attorneys general asked Congress to pass a law prohibiting PBMs from owning pharmacies.
• An American Medical Association study and analysis this summer appealed to federal lawmakers to enact reforms for transparency and accountability.

Why it matters: The Big 3 PBMs processed 80% of US prescription drug claims last year, with Cigna’s Express Scripts garnering the largest 30% share, per a Drug Channels Institute report in March.

• 10% of high-priced brand drugs account for 88% of costs, per Cigna.

Implications for pharma companies: Cigna’s decision to phase out rebates marks a big shift in the way prescription drugs are priced and paid for, and could pressure CVS and UnitedHealth to expand on their own efforts to make drug pricing more transparent for clients.

Shifting discounts directly to consumers also indicates another step in the overall healthcare march toward more direct-to-consumer (D2C) models. Patients are beginning to see some lower drug prices online and at the pharmacy counter, but they’re also facing more complexity and responsibility.

Healthcare and pharma marketers will need to engage these more empowered and potentially more overwhelmed consumers with clear, actionable communications. Digital educational tools like savings finders, cost calculators, and coverage explainers can help patients navigate their medication options, not only improving affordability but also adherence and long-term loyalty.