Employers Champion Rebate-Free Pharmacy Benefit Models for Enhanced Transparency and Predictability

New Survey Reveals Overwhelming Employer Preference for Simplified Drug Pricing, Signaling a Potential Industry Shift

May 13, 2026 – A significant majority of employers are advocating for a fundamental shift in how prescription drug benefits are managed, with more than 90% expressing a preference for rebate-free models. This overwhelming consensus, revealed in a recent survey commissioned by Evernorth Health, highlights a growing demand for increased transparency and predictability in pharmacy spending. The findings underscore a growing discontent with the current system, where opaque rebate negotiations by Pharmacy Benefit Managers (PBMs) are perceived as a significant driver of escalating medication costs.

The survey, which polled 300 employers overseeing workforces of at least 1,000 individuals, indicates that the complexity and perceived self-interest inherent in rebate-driven models are no longer aligned with the needs of businesses aiming to provide accessible and affordable healthcare for their employees. Employers are actively seeking a more straightforward approach, one that prioritizes the actual cost of medications and simplifies budgeting for these essential benefits.

The Case Against Rebates: A Demand for Clarity

The current PBM model, which acts as an intermediary between payers, drug manufacturers, and pharmacies, often involves intricate negotiations for rebates. While proponents argue these rebates can lower overall drug costs for payers, critics contend that the system incentivizes PBMs to favor more expensive drugs that offer higher rebate payouts. This dynamic, critics argue, can lead to inflated list prices and ultimately higher out-of-pocket expenses for patients and increased overall spending for employers.

The Evernorth survey provides concrete data supporting this critique. Eighty-seven percent of surveyed employers stated that a rebate-free approach would better align with their organization’s strategic objectives. Furthermore, a resounding 86% believe that eliminating rebates would significantly improve the predictability of their pharmacy spending. This predictability is crucial for businesses grappling with rising healthcare costs and the need to manage budgets effectively.

Ashley Holzworth-Nash, vice president of retail network product strategy and solutions at Evernorth, articulated the core sentiment of the surveyed employers: "This data confirms employers want pharmacy benefits that are easier to understand, easier to budget for, and designed around the experience of the people they cover." This statement encapsulates the desire for a more patient-centric and financially responsible approach to prescription drug management.

A Shifting Landscape: Regulatory and Industry Pressures

The employer sentiment expressed in the Evernorth survey is not occurring in a vacuum. The PBM industry has been under intense scrutiny from regulators and lawmakers for years. The opaque nature of their business practices and their role in escalating drug prices have become a focal point of public and political discourse.

In a significant move earlier this year, President Donald Trump signed a funding bill that included several PBM reforms. These reforms introduced new transparency requirements and explicitly prohibited PBMs from linking their compensation to manufacturers’ list prices in Medicare Part D. This legislative action signaled a growing governmental commitment to curbing the influence of PBMs and promoting greater accountability within the drug supply chain.

Prior to this, in 2024, the Federal Trade Commission (FTC) took a more aggressive stance, filing lawsuits against the nation’s largest PBMs – UnitedHealth’s Optum Rx, CVS’s Caremark, and Cigna’s Express Scripts. The FTC alleged that these PBMs engaged in practices that steered patients towards more expensive insulins to secure higher rebates. This legal action underscored the seriousness with which regulatory bodies are examining the PBMs’ business models and their impact on patient care and costs.

The Evolution of PBM Strategies: Embracing Change

In response to mounting pressure, some of the largest PBMs have begun to adapt their strategies, signaling a potential pivot away from traditional rebate-centric models. Express Scripts, one of the PBMs named in the FTC lawsuit, reached a settlement earlier this year. As part of the agreement, the company committed to ceasing the practice of prioritizing drugs with high list prices on its standard formularies and to delinking its compensation from the savings it negotiates with drugmakers.

Interestingly, Express Scripts had already begun moving in this direction. In October of the previous year, the company announced its intention to transition to a rebate-free model. This proactive shift suggests an awareness within the industry of the changing tides and a recognition of the need to align with evolving employer and regulatory expectations.

More recently, Optum Rx, another major player, announced its own strategic shift. On Monday, Optum Rx revealed its move towards a new model where clients will pay monthly fees. Crucially, these fees will not be linked to manufacturers’ list prices or prescription volumes, aiming to offer greater transparency and predictability in pricing.

Supporting Data: The Financial Impact of Rebates

The persistent reliance on rebates within the pharmaceutical supply chain has significant financial implications for employers and, by extension, their employees. While the intention of rebates is often to lower the net cost of drugs, the lack of transparency makes it difficult for employers to ascertain whether these savings are genuinely being passed on.

The survey data from Evernorth provides further quantitative support for the employers’ position. The figure of 86% of employers believing a rebate-free model would improve the predictability of pharmacy spending is particularly noteworthy. Predictability in healthcare spending is a critical component of financial planning for businesses, allowing for more accurate budgeting and resource allocation. Without it, companies are vulnerable to unexpected surges in drug costs, which can strain budgets and potentially lead to difficult decisions regarding employee benefits or overall business operations.

Moreover, the statistic that 87% of respondents feel a rebate-free approach better aligns with their organization’s needs speaks to a broader strategic misalignment. Employers are increasingly focused on holistic employee well-being and financial security. A complex and opaque system that may inadvertently drive up costs runs counter to these objectives. They are looking for solutions that are not only cost-effective but also easy to administer and understand, thereby reducing administrative burdens and potential for confusion among employees.

Implications for the Future of Pharmacy Benefits

The overwhelming employer consensus and the proactive adjustments by major PBMs signal a potential paradigm shift in the pharmacy benefit management landscape. The traditional rebate model, long a cornerstone of PBM operations, appears to be facing an existential challenge.

For employers, the move towards rebate-free models offers the promise of greater control over their pharmacy spend, enhanced transparency in drug pricing, and improved predictability in budgeting. This can lead to more sustainable healthcare benefit programs and potentially alleviate some of the financial pressures faced by employees due to high prescription costs.

For PBMs, adapting to these demands will be crucial for their continued relevance and success. Those that embrace transparency, simplify their pricing structures, and demonstrably align their interests with those of their clients and the patients they serve are likely to thrive. This may involve developing new service offerings, investing in advanced data analytics to provide clearer cost insights, and fostering stronger partnerships with employers based on shared goals of affordability and accessibility.

The regulatory environment will undoubtedly continue to play a significant role in shaping this evolution. Ongoing scrutiny and potential further legislative actions could accelerate the transition away from rebate-driven models and solidify the adoption of more transparent and predictable approaches.

Ultimately, the growing chorus of employer voices demanding change, coupled with evolving industry practices and regulatory oversight, suggests a future where prescription drug pricing is more straightforward, understandable, and aligned with the ultimate goal of providing affordable and effective healthcare for all. The findings from the Evernorth survey serve as a powerful indicator that the era of opaque rebate negotiations may be drawing to a close, paving the way for a more transparent and employer-aligned future in pharmacy benefit management.