Cost-plus pharmacy and pass-through pharmacy benefit models Market Outlook 2026–2033: Growth Drivers, Key Companies, Strategic Developments & Adoption Forecast — A Meticulous Next™ Foresight Brief

This Meticulous Next™ brief examines cost-plus pharmacy and pass-through pharmacy benefit models, where pharmacies charge the acquisition cost of a drug plus a stated fee and pharmacy benefit managers pass all rebates to the employer or plan and earn a flat administrative fee. It tests how far transparent pricing becomes the standard employer contract by 2033, and what that means for employers, payers, pharmacy benefit managers and pharmacies.

Federal reform has set the direction. The Consolidated Appropriations Act, 2026 was signed on 3 February 2026 and requires Medicare Part D pharmacy benefit managers to move to flat administrative fees, pass 100% of rebates, fees and other remuneration to the plan, and report spending and rebates twice a year, with penalties set by CMS for non-compliance. The conclusion is that the largest purchaser of drugs in the country has ended the link between PBM pay and drug list prices, and commercial contracts are likely to follow.

Employers are already moving. Among self-funded employers, use of CVS Caremark, Express Scripts or Optum Rx fell from 63.4% in 2025 to 54.3% in 2026, and among employers with fewer than 1,000 employees it fell from 69.7% to 43.8%, while 56% of clients of the three said they were considering a switch within one to three years. The conclusion is that smaller employers are leaving the large PBMs fastest, and transparent PBMs and cost-plus pharmacies have a ready base of buyers.

The large PBMs are changing their own terms. Optum Rx committed to full rebate pass-through from January 2026 and announced a fee-based model in May 2026, and Express Scripts plans rebate-free pass-through pricing for fully insured clients in 2027 and for all clients by 2028. The conclusion is that the largest players now compete on transparency, which makes pass-through the normal offer and not a niche product.

Cost-plus pharmacy has proved its price advantage. Cost Plus Drugs sells at acquisition cost plus 15% and carries about 2,300 medications, and a study in the Annals of Internal Medicine found that nearly 80% of generic prescriptions with out-of-pocket costs above USD 15 would have been cheaper through Cost Plus, with a median cost of USD 25 against USD 140 for prescriptions with cost sharing above USD 100. The conclusion is that cost-plus pricing is cheapest for generics, and it works best as a network option beside a PBM.

The brief treats cost-plus pharmacy and pass-through pharmacy benefit models as an accelerating signal with a seven year horizon to 2033. It identifies which operators, employers and payers move first and what each means for fees, rebates and drug cost. It is a focused 103-page decision brief that presents an indicative trajectory rather than a segmented market model.

The pass-through contract is the core model. The Consolidated Appropriations Act, 2026 applies reporting and notice provisions to plan years starting on or after 3 August 2028, and pass-through rules apply to calendar-year plans from 1 January 2029. The conclusion is that employers have a clear date by which transparent terms must be in place, which gives PBMs a fixed timetable to rebuild their contracts.

Pass-through terms still differ between drug types in practice. A 2026 survey by Pharmaceutical Strategies Group found that 66% of employers receive 100% of rebates on traditional drugs and only 54% do so on specialty drugs, with nearly half of employers using other rebate arrangements for specialty drugs. The conclusion is that specialty drugs are the main gap in pass-through, and this is where employers gain most from tighter contract terms.

Employers are adopting next-generation arrangements. The Business Group on Health 2027 Employer Healthcare Strategy Survey of 127 large employers found that 32% will offer transparent or next-generation PBM arrangements in 2027 and another 47% are considering them for 2028 or 2029. The conclusion is that adoption among large employers is set to reach a majority within the horizon, and contract renewals are the moment of change.

Direct contracting with manufacturers is opening a second route. GoodRx Employer Direct launched in February 2026 and Eli Lilly and Company launched Employer Connect in March 2026, offering Zepbound at a USD 449 monthly list price. The conclusion is that manufacturers now sell high-cost obesity drugs straight to employers, which removes a layer of rebate negotiation for the drugs that drive most of the growth in spending.

The limits are pushback from large PBMs and rebate-based contracts, the compliance burden and consolidation of small PBMs, and the limits of specialty drug pass-through. The brief tests each limit against the contract evidence to 2033.

The cost-plus pharmacy and pass-through pharmacy benefit models market, covering service fees and acquisition cost markups earned by cost-plus pharmacies and by transparent, pass-through and fee-based pharmacy benefit managers, measured by annual net revenue from administrative fees and pharmacy markups, and excluding drug cost passed through at acquisition price, rebate-retaining pharmacy benefit contracts, and manufacturer direct-to-consumer sales, is valued at USD 3–5 billion in 2026 and is projected to reach USD 10.75–17.92 billion by 2033, at a CAGR of 20%.

The 2026 base rests on administrative fees and pharmacy markups earned by cost-plus pharmacies such as Cost Plus Drugs and by transparent and fee-based PBMs, with fee-based models of the large PBMs added as they start. Growth then follows the number of employers on transparent contracts, the share of drug spend under pass-through terms and the spread of cost-plus pharmacy networks.

The forecast is sensitive to the pace of federal rules for commercial plans, the size of fees that PBMs set under fee-based models and the share of employer spend on high-cost specialty and obesity drugs.

The base case assumes steady growth in employers on transparent contracts, bringing the inflection to about 2029 and a 2033 value near the middle of the range. An accelerated case assumes fast adoption by large employers and early extension of federal rules to commercial plans, bringing the inflection to 2028 and lifting the 2033 value to the top of the range. A delayed case assumes slow action on commercial rules and strong pushback from rebate-based contracts, moving the inflection to 2031 and holding growth at the bottom of the range.

Growth drivers

• Employer demand for price visibility.
• Payer need to control specialty and obesity drug spend.
• Federal and state PBM reform.
• Growth of employer coverage of high-cost drugs.

Enablers

• Pricing data and claims tools.
• Pharmacy and PBM contracts.
• Contract and project evidence.
• Manufacturer direct contracting partnerships.

Restraints and barriers

• Price pressure and return on investment.
• Pushback from large PBMs and rebate-based contracts.
• Compliance burden and consolidation of small PBMs.
• Differences in state and federal pharmacy benefit rules.

The direction of cost-plus pharmacy and pass-through pharmacy benefit models is set by employer demand for price visibility, payer need to control specialty and obesity drug spend, federal and state PBM reform, pricing data and claims tools, and the readiness of PBMs and pharmacies to work on fee-based terms.

The key participants in cost-plus pharmacy and pass-through pharmacy benefit models and transparent drug pricing include CVS Health Corporation, UnitedHealth Group Incorporated, The Cigna Group, Humana Inc., Elevance Health, Inc., Centene Corporation, Eli Lilly and Company, Novo Nordisk A/S, GoodRx Holdings, Inc., Amazon.com, Inc., Cardinal Health, Inc., McKesson Corporation, Cencora, Inc., Walmart Inc., The Kroger Co., Costco Wholesale Corporation, Mark Cuban Cost Plus Drug Company, PBC, Judi Health, Inc., Rightway Healthcare, Inc., SmithRx, Inc., Abarca Health, LucyRx, Paytient, Hims & Hers Health, Inc., Pfizer Inc., Merck & Co., Inc., AstraZeneca PLC, Bristol-Myers Squibb Company, Sanofi, Johnson & Johnson, Lockton Companies, LLC, Marsh & McLennan Companies, Inc., Aon plc, Willis Towers Watson Public Limited Company, Arthur J. Gallagher & Co., the Business Group on Health, the National Alliance of Healthcare Purchaser Coalitions, the Federal Trade Commission, the Centers for Medicare & Medicaid Services, the Department of Health and Human Services and the US Food and Drug Administration.

The brief profiles representative participants in each archetype and assesses which are positioned to lead as rebate-free and direct contracting models reach scale.

CVS Health Corporation, UnitedHealth Group Incorporated and The Cigna Group lead among large PBMs that are moving to fee-based terms, Mark Cuban Cost Plus Drug Company, PBC, Judi Health, Inc. and Rightway Healthcare, Inc. lead among transparent PBMs and cost-plus pharmacies, and Eli Lilly and Company leads among manufacturers that contract directly with employers. Competitive intensity is rising as the large PBMs adopt transparent terms and small PBMs consolidate.

Where value migrates.

In 2026 value sits with the large PBMs that still run most employer contracts and with cost-plus pharmacies that win generic prescriptions on price. By 2029 it moves toward operators that run rebate-free, fee-based contracts and pair them with direct manufacturer offers, because employers want clear fees and lower cost for high-cost drugs. By 2033 it settles with transparent pricing as the standard employer contract, where data, reporting and clear fee terms carry the margin. Margins hold for operators with scale, clean data and clear fees, and narrow for those that depend on rebate retention that employers and regulators no longer accept.

Federal reform, falling use of the largest PBMs and the move of large PBMs to fee-based terms support growth, while pushback from rebate-based contracts, the burden on small PBMs and gaps in specialty drug pass-through hold back the pace.

Slow rules for commercial plans, small PBM exits or weak employer follow-through could slow progress. The brief therefore tracks four indicators: administrative fee and markup per prescription, employers on transparent contracts, share of drug spend under pass-through terms and the share of employers using the three largest PBMs.

Fee-based PBM contracts at scale first, then rebate-free pass-through and direct contracting at scale, then standard status for transparent pricing is the expected order of change.