Sounds like a lot of people are up in arms about Cigna switching to a "rebate-free" model. Don't those drive a ton of revenue? I'm assuming Cigna is not going to just give up that revenue stream. Anyone know what's actually going on?
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Good luck to Cigna making the rebate-free model work. POS rebates have been around for years and there is a reason why it’s not the norm. I predict they’ll lose large clients if they force them to abide by this rebate model. Try telling a client that they no longer will receive their multimillion dollar checks for rebates where they own the risk. That’s a non-starter.
Simple…the government got tons of complaints concerning PBMs abuse of rebates and fees.
Congress has been looking into it and started writing legislation.
Cigna (and CVS/UHG) don’t want legislation, so they’re trying to get out ahead of it in hopes that they can appease congress just enough with favorable terms as to avoid unfavorable congressional rules.
Cigna is being neither charitable nor shady. It’s just business.
Cigna would never simply give up profits, the model is being restructured. They are changing the optics and diversifying where it (that profit) comes from. Rebates have been criticized in creating higher list prices, PBMs favoring high rebate rxs and lack of transparency. They believe this new model will look more transparent but it’s just a way for Cigna to stand out, look more pro-consumer and hope it pre-emits stricter regulations. Bottom line they’re not sacrificing money. They’re just moving it from rebate bucket to fee and cost plus bucket while getting some political/competitive goodwill.