Optum Rx, the pharmacy benefit management division of UnitedHealth Group, has fully expanded its cost-based reimbursement model to 100% of its community and independent pharmacy network, partnering with additional PSAOs to cover over 17,000 locations and provide greater financial predictability amid soaring branded drug costs.
Glimpse:
Announced on December 18, 2025, Optum Rx’s completion of the cost-based model transition initially unveiled in March aligns reimbursements more closely with pharmacies’ actual drug acquisition costs, particularly for branded medications. This shift responds to rising manufacturer prices and increased branded drug utilization, offering stability for independent pharmacies while preserving generic incentives. Industry reactions are cautiously positive, viewing it as a step toward fairer PBM practices.
Optum Rx has achieved full coverage of its innovative cost-based reimbursement model across its entire network of community and independent pharmacies, marking a significant modernization in how pharmacy benefit managers (PBMs) compensate retail partners. The expansion, finalized through partnerships with three additional Pharmacy Services Administrative Organizations (PSAOs), now encompasses approximately 17,000+ locations nationwide.
This completes a rollout that began earlier in 2025, following Optum Rx’s March announcement to pivot from legacy models originally designed to promote generics—to one that better reflects current market realities. With generic adoption now robust, pharmacies have faced mounting pressures from higher utilization of expensive branded drugs, exacerbated by manufacturer price hikes (new branded launches in 2023 averaged 35% higher than the prior year).
The new model reimburses pharmacies based on acquisition costs plus a defined markup and potential dispensing fee, providing greater transparency, reduced payment variability, and enhanced financial predictability. This enables pharmacies to stock medications more confidently, potentially alleviating shortages, delays, and access issues for patients. Optum Rx emphasized incorporating pharmacy feedback on stability, member access, and sustainability during contract design.
Ongoing discussions focus on high-cost categories like GLP-1 weight-loss drugs and specialty medications, which continue to fuel pharmacy spending growth. The initiative builds on prior efforts, including 2025 increases in brand reimbursements for 2,300 unaffiliated independents.
In a fragmented industry where PBMs face scrutiny over reimbursement practices, this move positions Optum Rx as a leader in evolving toward cost-plus structures similar to trends seen with competitors. Pharmacy groups have responded with measured optimism, acknowledging progress while noting broader challenges remain.
As drug pricing dynamics intensify, this nationwide adoption could bolster community pharmacy viability, ensuring they remain vital frontline providers in patient care.
“To help the pharmacies adapt, the new reimbursement model is designed to better match these rising costs offering greater financial predictability while supporting medication access.”
By
HB Team
