By Healthcare Dive Staff
Published May 12, 2026
The landscape of American healthcare finance is undergoing a seismic shift. As pharmacy benefit managers (PBMs)—the powerful intermediaries between drug manufacturers, insurers, and pharmacies—face unprecedented scrutiny, a new study reveals that the primary purchasers of these benefits, the nation’s employers, are clamoring for a total structural overhaul. According to a comprehensive survey conducted by the Penta Group for Evernorth Health Services, more than 90% of employers now advocate for the elimination of rebate-based models in favor of transparent, fee-based pharmacy benefits.
This consensus among corporate leaders marks a turning point in the long-standing debate over how prescription drug costs are calculated, negotiated, and ultimately passed down to employees and businesses.
The Core Conflict: Why Rebates Are Under Fire
Pharmacy Benefit Managers operate at the heart of the U.S. drug supply chain. Their traditional business model involves negotiating discounts—known as rebates—from pharmaceutical manufacturers. In theory, these rebates are intended to lower the net cost of drugs. However, critics, including federal regulators and corporate purchasers, argue that the system creates perverse incentives.
Because PBMs often retain a percentage of these rebates as profit, they are financially incentivized to favor drugs with higher "list prices" that command larger rebates, rather than drugs that are medically effective but carry lower costs. This opacity has drawn fire from the Federal Trade Commission (FTC), which has alleged that these practices prioritize PBM margins over patient access and affordability.
The survey of 300 employers, each managing workforces of at least 1,000, highlights a deep-seated distrust in this status quo. For the average employer, the complexity of rebate accounting makes it nearly impossible to predict pharmacy spending, complicating annual budgeting and health plan design.
A Chronology of Regulatory and Corporate Reform
The movement toward a rebate-free environment did not happen in a vacuum. It is the result of years of mounting pressure from both the public and private sectors.
- 2024: The FTC Takes Action. The Federal Trade Commission launched a landmark lawsuit against the "Big Three" PBMs—UnitedHealth’s Optum Rx, CVS Caremark, and Cigna’s Express Scripts—alleging they engaged in anticompetitive practices by steering patients toward high-cost insulin to maximize rebates.
- Late 2024: The Shift Begins. Recognizing the shifting winds, Express Scripts began transitioning toward a "cost-plus" model, aiming to decouple their compensation from the price of the drugs they manage.
- Early 2026: Federal Legislative Intervention. President Donald Trump signed a major funding bill into law, which included significant PBM reform mandates. These included strict transparency requirements and a formal prohibition on linking PBM compensation to manufacturers’ list prices within Medicare Part D.
- May 2026: The Industry Pivot. Following the legislative push, major players have accelerated their transition. Most recently, Optum Rx announced a shift toward a fee-based model, where clients pay a flat monthly fee, effectively removing the reliance on drug list prices or volume-based incentives.
Supporting Data: The Employer Sentiment
The Penta Group research provides the most compelling evidence to date that the industry’s shift is being driven by client demand rather than just regulatory compliance. The survey data is stark:
- 90% Transparency Benchmark: Over 90% of employers agreed that a rebate-free approach is the most effective way to improve drug price transparency.
- Alignment with Corporate Needs: 87% of surveyed employers stated that a rebate-free model better aligns with their organizational goals of predictability and cost containment.
- Budgetary Predictability: 86% of respondents confirmed that removing rebates would significantly improve their ability to forecast pharmacy spending, allowing for more stable premiums for their covered employees.
These figures represent a clear mandate. Employers are no longer willing to accept the "black box" of PBM billing; they are demanding a modular, flat-fee structure that allows them to see exactly what they are paying for—and why.
Official Responses and Strategic Shifts
Industry leaders are framing these changes not merely as a response to regulation, but as a strategic evolution of their business models.
"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," said Ashley Holzworth-Nash, vice president of retail network product strategy and solutions at Evernorth.
The transition, however, is complex. As Express Scripts and Optum Rx move toward flat-fee models, the entire pharmacy supply chain must recalibrate. The settlement reached between the FTC and Express Scripts earlier this year serves as a blueprint for this transition. Under the agreement, Express Scripts committed to no longer favoring drugs with artificially inflated list prices on their standard formularies—a move that fundamentally changes how PBMs compete for business.
Implications: The Future of Pharmacy Benefits
The shift toward transparency carries profound implications for the future of the U.S. healthcare system.
1. The Death of the "Spread"
The "spread" model—where a PBM charges a health plan more for a drug than it pays the pharmacy, keeping the difference—is likely to disappear. As transparency becomes a market requirement, PBMs will be forced to pivot toward "pass-through" models where 100% of the manufacturer discounts are passed directly to the employer.
2. A Focus on Net Cost
In a post-rebate world, the primary metric of success for a PBM will be the net cost of a drug. Employers will be looking for partners who can demonstrate the lowest total cost of care, not the highest rebate check. This will likely force manufacturers to lower their list prices, as high-list-price strategies will no longer serve as a tool to gain favorable placement on PBM formularies.
3. Increased Scrutiny on PBM Compensation
With the federal government having already prohibited the linking of pay to list prices in Medicare, it is highly probable that similar standards will be applied to the commercial market. The survey results suggest that if private industry does not adopt these standards voluntarily, employers will lobby for further federal intervention to ensure market-wide standardization.
4. The Rise of Independent Pharmacy Options
As PBMs change their models, independent pharmacies—which have historically been squeezed by PBM fees—may see a resurgence. A more transparent payment structure, based on fair market fees rather than complex rebate games, could provide the financial breathing room necessary for smaller, community-based pharmacies to remain competitive.
Conclusion: A Turning Point
The era of the "rebate-driven" PBM appears to be coming to an end. The convergence of federal legal action, executive-level legislative reform, and overwhelming demand from the employer community has created a "perfect storm" for change.
While the transition to a transparent, fee-based model will undoubtedly involve growing pains for the PBM industry, the long-term prognosis for the U.S. healthcare system is one of greater predictability. By aligning the incentives of PBMs with the budgetary needs of employers, the industry is moving toward a system that prioritizes the patient’s wallet as much as the pharmacy’s bottom line. For the 300 employers surveyed—and the millions of workers they represent—this shift toward transparency cannot come soon enough.
