Don’t Fall for the Cigna Head Fake

By Mark Blum, Managing Director, PBM Accountability Project

The insurance carrier Cigna’s Evernorth division issued a recent announcement that its pharmacy benefit manager (PBM) Express Scripts will stop collecting manufacturer rebates in 2028. The announcement was the PBM equivalent of a head fake in football, an all-too-common deflection tactic well-known to those who have tracked the PBM industry since inception. The insurance company that owns Express Scripts wants policy makers to believe that its PBM is going in a new direction, seeking to put savings back in the pockets of patients, employers and taxpayers – while in reality, the PBM is merely modifying the schemes through which it will increase prescription drug costs and changing the revenue lines through which greater gross profits will be extracted from taxpayers, employers, pharmacists and patients.

Cigna’s announcement is, in fact, a validation of the need to enact real and enforceable PBM reform.

We’ve seen similar PBM head fakes before. A comprehensive analysis of PBM financial flows from 2017 through 2019 – a period when PBMs felt the heat of intensifying scrutiny by  lawmakers, regulators and public thought leaders – revealed that PBMs reduced their own retention of rebates by 61%, yet managed to increase their gross profits by billions of dollars through deploying alternative schemes to raise prescription drug prices and extract even greater profits from patients, plan sponsors and pharmacists.

Nobody should doubt that it wasn’t a change of heart that motivated Cigna’s announcement of its plan to end Express Scripts’ retention of rebates. Rather, the Express Scripts’ head fake is an attempt to deflect mounting scrutiny of PBM reform advocates, lawmakers and President Trump, himself, at a time when bipartisan Congressional momentum toward enactment of impactful PBM reform appears temporarily paused. Nobody should be fooled.

Whether or not Cigna acts on its promise to curtail its retention of rebates remains to be seen. The one thing that is clear in the otherwise murky realm of PBM business practices: Express Scripts’ profitability will not be diminished by passthroughs of rebates. Since 2020, each of the Big 3 PBMs has become vertically integrated with a Big 3 insurance conglomerate. And each of the Big 3 insurance conglomerates has launched a new entity called a group purchasing organization (GPO) for which a Big 3 PBM is either the principal owner or an affiliated company. Two of these Big 3 GPOs are located in Europe, where they can avoid scrutiny and oversight by US lawmakers and regulators – and they can profiteer by skimming off rebate revenues that GPOs negotiate with pharmaceutical manufacturers before the first PBM rebate dollar is (or is not) passed through to a patient or customer of a US-based PBM affiliate. Over the past five years, GPOs have become the most productive new vehicles for extraction of rebate revenues by the Big 3 insurance carriers and their PBMs. 

Cigna’s GPO, based in Switzerland, is named Ascent Health Services. Consider this: In March 2024, an Inspector General of the US Office of Personnel Management released a report on Cigna’s PBM Express Scripts’ provision of prescription drug benefits to 200,000 post office employees and retiree participants in the American Postal Workers Union health plan. The Inspector General’s audit revealed that Express Scripts had bilked the postal workers’ health plan by $45 million in overcharges over a 5-year period. Moreover, the Inspector General found that the largest chunk of the overcharges – nearly $16 million – was in the form of rebates retained by Ascent Health Services, owned by Cigna, and therefore a sister company of Express Scripts. This, despite the fact that the Express Scripts’ contract with the health plan required 100% passthrough of rebates. 

Now, the same Express Scripts is promising, again, to voluntarily stop retaining rebate dollars. It’s no coincidence that this announcement comes in the midst of a remarkable period when lawmakers, polarized by every other issue, have found bipartisan common ground to support historic PBM reforms.     

We call on Members of Congress: “Don’t fall for the Express Scripts’ head fake!”   

Voluntary self-regulation will never replace the need for strong, enforceable legislation. Truly effective PBM reform must incorporate principles of transparency, oversight, enforceability and alignment of PBM interests and incentives with those of PBM clients and patients.  

It is more important, now, than ever before that Members of Congress finish the important work they’ve begun toward delivering real, enforceable reforms that will ensure PBM accountability, prevent profiteering at the expense of patients and taxpayers, and guarantee that prescription drug savings flow directly to patients and those who pay for care.