OptumRx Adjusts Pharmacy Payment Model Amid Industry Scrutiny

OptumRx, the pharmacy benefit management (PBM) arm of UnitedHealth Group, has announced a change in its reimbursement structure, shifting to higher payments for brand-name drugs while reducing payments for generics, Axios reports.

The move comes as PBMs face increasing scrutiny over their business practices and the impact on independent pharmacies.

PBMs like OptumRx act as intermediaries between drug manufacturers, insurers, and pharmacies. Critics argue that these companies use anticompetitive tactics that can steer business toward their own affiliates while disadvantaging independent pharmacies. Lawmakers and regulators have recently intensified their focus on PBMs, with bipartisan efforts to reform reimbursement practices and increase transparency.

OptumRx’s announcement marks its third recent change to business practices aimed at addressing common concerns within the pharmacy sector. Earlier this year, a major Federal Trade Commission (FTC) report accused PBMs of “squeezing Main Street pharmacies,” reflecting broader concerns about how these companies operate.

Congress has also taken notice, with a bipartisan group of senators recently introducing legislation targeting PBM reimbursement policies. The proposed bill would prohibit practices such as reducing or clawing back payments to pharmacies and would require that Medicaid payments to PBMs be passed directly to pharmacies. Some lawmakers have even suggested banning PBMs and insurers from owning pharmacies altogether.

According to OptumRx, the shift in its payment model is intended to address an outdated industry approach that initially promoted the use of generics but has led to imbalances in pharmacy reimbursement.

“This move will help correct imbalances in how pharmacies are paid for brand and generic drugs and will ensure greater access to medicines for patients across the country,” said OptumRx CEO Patrick Conway.

While overall pharmacy reimbursement rates will remain unchanged, the company believes this adjustment will help pharmacies stock a wider range of medications and alleviate drug shortages. The changes take effect immediately and will be fully implemented by 2028.

In addition to adjusting its payment model, OptumRx has recently taken steps to reduce administrative burdens for pharmacies and patients. It announced plans to eliminate annual reauthorization requirements for 80 medications, including those used for cystic fibrosis and asthma, cutting total prior authorizations by more than 10%.

PBM business practices, including the use of drug rebates and prior authorizations, have been a focus of healthcare reform efforts. While the Biden administration has attempted to regulate insurers’ prior authorization processes, prescription drugs were exempted from recent federal rules, leaving PBMs largely untouched by those changes.