Optum Rx Expands Cost-Based Reimbursement Model Across Entire Community Pharmacy Network

The move brings 100% of participating network pharmacies under the new structure, covering approximately 17,000 locations nationwide.

Optum Rx has completed the expansion of its cost-based pharmacy reimbursement model across its entire network of community and independent pharmacies, the company confirmed on December 18.

The move brings 100% of participating network pharmacies under the new structure, covering approximately 17,000 locations nationwide.

The pharmacy benefit management arm of UnitedHealth Group initially announced the shift earlier this year, positioning the model as a response to rising drug acquisition costs—particularly for branded medications. Optum Rx had previously stated that it expects the full rollout of the model to be completed by January 2028.

As part of the expansion, Optum Rx has signed three additional pharmacy services administrative organizations (PSAOs), broadening the reach of the model across independent and community pharmacies.

According to the company, the traditional reimbursement system was designed primarily to encourage the use of lower-cost generic drugs. However, changes in prescribing patterns have led to increased utilization of branded medications, creating cost pressures for pharmacies operating under existing payment structures.

Mary Jo Jones, vice president of network contracting and industry relations at Optum Rx, said the company began developing the cost-based model in response to these utilization shifts.

“To help the pharmacies adapt, the new reimbursement model is designed to better match these rising costs,” Jones told Fierce Healthcare. She added that the approach is intended to offer greater financial predictability for pharmacies while supporting medication access.

Optum noted that pharmaceutical manufacturers launched new branded drugs in 2023 at prices averaging 35% higher than products introduced the year before. U.S. list prices for branded medications also remain significantly higher than in many other countries, further amplifying cost pressures across the supply chain.

Industry groups have reacted cautiously to the announcement. Brian Hose, CEO of Epic Pharmacy Network, described the change as a “meaningful step in the right direction,” while noting that broader reimbursement challenges for independent pharmacies remain unresolved.

Jones said Optum Rx worked closely with PSAO partners while designing the new contracts, incorporating feedback related to reimbursement stability, member access, and pharmacy sustainability.

She added that discussions with pharmacy partners are ongoing, particularly around high-cost categories such as GLP-1 medications and specialty drugs, which continue to drive spending growth across the pharmacy benefit landscape.

Optum Rx said interest from independent pharmacies remains strong as the company refines the model alongside other initiatives aimed at addressing evolving pharmacy economics.

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