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Over the past decade, states have spent a lot of energy trying to rein in pharmacy benefit managers. Across all fifty states, lawmakers have passed 227 separate statutes that touch everything from PBM licensing to spread pricing to gag clause restrictions. On paper, it looks like a full court press.
In reality, none of it substantially changed the core dynamic. As long as employers and health plans continue buying the same PBM products built on the same incentives, the model stayed intact. Spread pricing remained a business strategy, not a loophole.
That is why something that happened last month is worth paying attention to.
During its recent earnings call, Cigna told investors that its new PBM model will require deliberate investment and that the company expects adjusted operating income from Pharmacy Benefit Services to decline in 2026. The market reacted quickly, and Cigna saw about 20% (i.e. 60 billion dollars) in value disappear within 48 hours, thought that has since normalized to under 10%.
Investors do not react like that unless they understand how central spread pricing and incentive misalignment have been to PBM profitability.
At the same time, Cigna introduced a new product called, Clearity. Clearity is built as a copayment-only health plan that removes deductibles and coinsurance and provides upfront pricing and decision support through Cigna’s AI tools. While Clearity is not a full overhaul of the PBM model, it supports Cigna’s broader shift toward transparency-focused benefit design.
PBMs have always operated with a structural conflict. They are paid to manage pharmacy costs, but they also generate revenue from the underlying mechanisms that shape those costs. They profit when drug spend rises, when certain drugs receive preferred placement, and when patients are routed to specific fulfillment channels.
Cigna’s acknowledgement, combined with the introduction of a more transparent plan design, is the clearest signal yet that unwinding these incentives requires real economic change, not a new label on the same model.
This type of structural shift mirrors what we have seen in other parts of the supply chain, such as state-specific DSCSA interpretations that reshaped compliance expectations (see our analysis of Alabama’s DSCSA rule change).¹
Employers have spent years dealing with opaque pricing, minimal visibility into drug-level economics, and rising costs that often lacked clinical justification. State PBM laws could not fix this because they did not change how PBMs earn money.
If a major PBM is preparing for reduced income as it remodels its business, employers finally have a concrete data point. They can ask competing PBMs why their economics still depend on the same spread-based practices when another large player is moving away from them.
The dynamic is similar to how serialization and supply chain modernization forced changes across manufacturers, wholesalers, and pharmacies.² Once one major stakeholder shifts, downstream pressure builds.
This is not a regulatory story. It is a business model story. When a PBM tells investors it will make less money as it adapts to a new approach, it confirms what many in and around the industry have believed for years. Spread pricing was profitable because it created misaligned incentives, not because it created value.
There is still a long way to go before spread pricing fades from the market, likely more than a decade. But the acknowledgement itself matters. It gives employers leverage, it increases competitive pressure, and it begins a conversation PBMs have managed to avoid for a long time.
For the first time in years, there is meaningful movement inside the PBM sector. Not from regulators, but from a PBM acknowledging that its revenue model must evolve. Cigna’s statement, along with the introduction of Clearity, shows that reducing spread pricing requires, and creates, real economic shifts, and they are coming to reality.
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