⚠ Rules That Could Change the PBM ModelModerate threat

UnitedHealth Group (UNH) — threat to the moat

Optum Rx has promised to pass all manufacturer rebates to clients by 2028, which will show how much of its margin the rebates were.

Optum Rx earns its living in a business that governments are trying to reshape. The 10-K warns that government investigations and studies of PBM practices could result in civil penalties or "could materially and adversely impact the PBM business model"1, and that many states already limit how PBMs set reimbursement for generic drugs2.

Optum Rx earnings from operations ($M)4,13520214,43620225,11520235,83620247,1932025UnitedHealth Group Forms 10-K FY2023 and FY2025
Growing steadily, before the rebate change.

The company has begun to change the model itself. It has committed to "100% pass-through of manufacturer drug rebate discounts" to clients by January 20283. Rebates are one of the ways a PBM is paid; passing all of them through changes where Optum Rx's margin comes from.

The stakes are the segment's $7,193 million of 2025 operating earnings4, the second-largest in the group after UnitedHealthcare.

The regulatory list is long. The 10-K notes that legislation regulating PBM activities affects the ability to limit access to pharmacy networks, that many states limit how PBMs set maximum allowable costs for generic drugs, and that formulary practices are reviewed by CMS, HHS and state insurance departments5.

The number to follow is Optum Rx's margin after the rebate change takes effect. If it holds near 4%, the business has found other ways to be paid; a fall toward 2% would say rebates were carrying the profit.

References
  1. ReportedThe 10-K warns that government investigations and studies of PBM practices could result in civil penalties or "could materially and adversely impact the PBM business model", and that many states already limit how PBMs set reimbursement for generic drugs.
    UnitedHealth Group Form 10-K for fiscal 2025 - Item 1A risk factors, competition, rate notices, reserve sensitivities and legal matters. — FY2025 · publ. 2 March 2026 · source ↗
  2. ReportedThe 10-K warns that government investigations and studies of PBM practices could result in civil penalties or "could materially and adversely impact the PBM business model", and that many states already limit how PBMs set reimbursement for generic drugs.
    UnitedHealth Group Form 10-K for fiscal 2025 - Item 1A risk factors, competition, rate notices, reserve sensitivities and legal matters. — FY2025 · publ. 2 March 2026 · source ↗
  3. ReportedIt has committed to "100% pass-through of manufacturer drug rebate discounts" to clients by January 2028.
    UnitedHealth Group second-quarter 2026 results release, Form 8-K exhibit 99.1 - commitments on prior approvals, rebates, ACA profits and the United Health Foundation, and recent transactions. — Q2 2026 · publ. 16 July 2026 · source ↗
  4. ReportedThe stakes are the segment's $7,193 million of 2025 operating earnings, the second-largest in the group after UnitedHealthcare.
    UnitedHealth Group Form 10-K for fiscal 2025 - financial statements and notes: segment note, CMS concentration, balance sheet, cash flow and capital. — FY2025 · publ. 2 March 2026 · source ↗
  5. ReportedThe 10-K notes that legislation regulating PBM activities affects the ability to limit access to pharmacy networks, that many states limit how PBMs set maximum allowable costs for generic drugs, and that formulary practices are reviewed by CMS, HHS and state insurance departments.
    UnitedHealth Group Form 10-K for fiscal 2025 - Item 1A risk factors, competition, rate notices, reserve sensitivities and legal matters. — FY2025 · publ. 2 March 2026 · source ↗
Sources
Generated September 26, 2026