Cigna Plan to End Drug Rebates Sparks Worst Selloff Since 2008

Cigna Group’s pledge to upend the way medicine is priced spooked Wall Street after the company warned the move would hurt profits in the next two years.

The company’s shares closed down 17% Thursday, their worst one-day drop since 2008, after Cigna executives warned of the margin pressure during an otherwise routine earnings call. It’s evidence that the company’s plan to eliminate many drug rebates — opaque payments that fueled years of attacks on Cigna and its peers — will hit its bottom line.

“This is a fundamental business model pivot,” Chief Operating Officer Brian Evanko said on a ...