One of the country’s Big Three pharmacy benefits managers (PBMs) is shifting to a flat‑fee, transparency‑focused pharmacy benefit model at a time when federal and state regulators are intensifying oversight and pressuring the industry to abandon opaque pricing practices.
Optum Rx has announced a new pricing model that replaces traditional PBM revenue structures with a flat, transparent fee applied across all clients.
The company says the shift is designed to simplify pharmacy benefit costs, increase predictability for plan sponsors, and give consumers clearer insight into what they pay for medications.
Optum Rx operates as part of Optum, which is owned by UnitedHealthcare Group, one of the top five health insurers in the country. Optum Rx itself is a one of the top three PBMs, which also include Express Scripts (Cigna/Evernorth) and CVS Caremark (CVS Health). Together, these PBMs process nearly 80% of all US prescription claims.
Under the new approach, Optum Rx will move away from pricing formulas tied to drug list prices or prescription volume. Instead, clients will pay a fixed per‑member, per‑month fee.
According to the company, this structure effectively eliminates spread pricing, a practice in which PBMs charge health plans more for a drug than they reimburse pharmacies and keep the difference. Employers and health plans have long argued that spread pricing obscures true drug costs and inflates spending.
Optum Rx also says it plans to offer total visibility into its fees, among them those connected with its group purchasing organization, and will disclose payments received from pharmaceutical manufacturers. Group purchasing arrangements are to transition completely to flat service fees by the end of 2027.
“This new Optum Rx model builds on our longstanding commitment to lowering costs and strengthening transparency by offering our clients a simpler and more predictable pharmacy system,” said Patrick Conway, CEO of Optum.
New cost‑awareness tools
As part of the rollout, Optum Rx is launching two digital tools aimed at improving price transparency at the point of prescribing, including Shop MyScript, which provides eligible patients with real‑time information on drug pricing, pharmacy options, and delivery choices immediately after a prescription is written.
Additionally, Optum’s Price Wise platform will provide an “all‑in” price for consumers paying outside their insurance benefits, including both the drug cost and a defined service fee.
The tools build on several changes Optum Rx has made in recent years, including a commitment to pass through all manufacturer rebates to clients by 2028, reduced prior authorization requirements for chronic condition medications, cost‑based payment terms for pharmacies, and increased reimbursement rates for certain independent pharmacies.
Criticism of PBM practices
The PBM industry has faced years of criticism from employers, pharmacies, patient advocates, and lawmakers. PBMs act as intermediaries between drug manufacturers, health plans, and pharmacies, negotiating prices and managing formularies. But critics argue the traditional model creates misaligned incentives.
Because PBMs often retain a portion of manufacturer rebates, they may favor higher‑priced drugs that generate larger rebates. This dynamic has been blamed for inflating drug costs and obscuring the true price of medications.
Employers and health plans have said the lack of transparency makes it nearly impossible to understand what they are paying for. These concerns have fueled bipartisan calls for reform and helped drive the regulatory momentum now reshaping the industry.
Intensifying scrutiny
Optum Rx’s overhaul comes at a moment when federal regulators are intensively examining the PBM business model.
Since industry’s three largest PBMs manage nearly 80% of US prescriptions, regulators say this consolidation can lower competition and contribute to higher drug costs.
A proposed Department of Labor rule under the Employee Retirement Income Security Act (ERISA) of 1974 would require PBMs and third‑party administrators to disclose all direct and indirect compensation they receive from drug manufacturers, pharmacies, and related entities.
ERISA sets federal standards for private-sector retirement and health plans, ensuring participant protections, fiduciary responsibilities, and legal recourse for benefits disputes.
The rule aims to give employer plan sponsors a clearer view of PBM revenue streams, many of which have historically been hidden through complex contractual arrangements. Optum Rx’s new model appears designed to align with these anticipated disclosure requirements.
The Federal Trade Commission also has been conducting an extensive inquiry into PBM business practices since 2022. Interim findings have criticized the effects of consolidation and opaque contracting on independent pharmacies and consumers.
The agency’s final report is expected to shape future enforcement actions and could influence how PBMs structure rebates, fees, and pharmacy networks.
Congress has introduced multiple bipartisan bills targeting PBM practices, including measures to ban spread pricing, require full rebate pass‑through, standardize reporting of manufacturer fees, and regulate pharmacy network design.
Meanwhile, the Inflation Reduction Act of 2022 and the Consolidated Appropriations Act (2026) include provisions requiring greater transparency in PBM operations and strengthening federal oversight of drug pricing intermediaries.
At the state level, legislatures have passed dozens of laws targeting PBM practices, including bans on spread pricing, requirements for clearer reporting, and new oversight mechanisms.
Several states also have enacted laws requiring PBMs to obtain licensure or registration, giving state regulators more authority to audit contracts and investigate complaints.
What it means for stakeholders
Optum Rx’s new model is designed to directly affect every participant in the prescription drug chain.
For plan sponsors such as employers and labor unions, the flat‑fee structure promises more predictable budgeting and better insight into where pharmacy dollars are used. The company’s commitment to pass through 100% of manufacturer rebates by 2028 further aligns PBM incentives with client goals.
For consumers, the new digital tools aim to make drug pricing more understandable at the moment decisions are made. And for pharmacies, especially independents, Optum Rx’s recent moves toward cost‑based reimbursement and higher dispensing fees may offer some relief in a market where many feel squeezed by PBM practices.
Whether Optum Rx’s overhaul becomes a model for the broader industry remains to be seen. But the shift signals that the era of opaque PBM pricing is under intense pressure from regulators, employers, and increasingly from consumers demanding to know what their medications really cost.
“By combining economic transparency for clients with digital tools that help patients shop for affordable options, we’re delivering a pharmacy system that is simple, easier to navigate and offers greater value,” said Jon Mahrt, CEO of Optum Rx and chief growth officer of Optum.