Cigna Sees Up to $600 Million Earnings Hit From Pharmacy Plan

Cigna Group’s plan to end drug rebates will reduce earnings by $500 million to $600 million, the company’s chief executive officer said at a congressional hearing Thursday in which the country’s biggest health insurers were grilled about health-care affordability.

It’s the first time Cigna has quantified the impact of its decision to end drug rebates, payments between drug companies and insurers that critics argue drive up health-care costs. In October Cigna announced the strategy, along with concessions to its largest clients, surprising investors and sending the stock on its worst slide since 2008.

“We made a pledge recently to ...