Cigna Flags Margin Pressure in Evernorth Pharmacy Benefit Business

NEW YORK, October 30, 2025 — Cigna Group (NYSE: CI) has warned investors that its pharmacy benefit management (PBM) business will face margin pressure over the next two years, as the company transitions some customers to a new model that eliminates after-market prescription drug rebates. The announcement caused Cigna shares to fall more than 14% in early trading on Thursday.

The insurer had previously announced plans to phase out prescription drug rebates for certain health plans by 2027, instead offering up-front discounts at pharmacies to reduce out-of-pocket costs for patients.

CEO Highlights Strategic Adjustments

CEO David Cordani said the company is making proactive adjustments to improve contract terms for clients operating heavily in government programs, such as Prime Therapeutics, the U.S. Department of Defense, and Centene (NYSE: CNC).

“Given the significant financial and affordability pressures for partners operating heavily in government programs, we have proactively improved the economic terms of the contracts for the benefit of these long term strategic clients,” Cordani said.
“As a result of these factors, we expect margin pressure within our pharmacy benefit service segment over the next two years.”

Impact on Evernorth and Financial Outlook

Cigna expects that operating income in its Evernorth unit, which houses the PBM business, will decline in 2026. The cautionary outlook slightly clouds the company’s recent performance, which had shown strength in the unit.

Despite the margin concerns, Cigna reported a third-quarter adjusted profit per share of $7.83, exceeding analysts’ estimates of $7.65 per share. The results were buoyed by continued growth in the Evernorth segment.

The company reaffirmed its 2025 profit forecast, signaling confidence in its broader operational strategy despite near-term pressures in the pharmacy benefit business.