UnitedHealth Group CEO Andrew Witty Defends PBMs

Andrew Witty

In his first investor call since UnitedHealthcare CEO Brian Thompson was shot and killed in early December, Andrew Witty, CEO of UnitedHealth Group, acknowledged the need for better healthcare outcomes and how the system needs to be less confusing and less complex.

But at the same time, he defended the pharmacy benefit manager industry (PBMs), stressing that prices of prescription drugs are too high compared with the rest of the world.

“OptumRx alone delivers many tens of billions of dollars in savings annually versus the pricing set by the manufacturers, including on the GLP ones, that sharply reduces the gap versus other countries,” Witty said during his opening remarks. “Prices in the U.S. are still multiples of what the rest of the world pays for the same drugs.”

Later on in the call when asked about the possibility of PBM reform, Witty said PBMs were the only effective mechanism across the system that holds the pharmaceutical companies accountable for prices. The PBM, he said, acts on behalf of the ultimate payer, the employer, the union, the state.

“It acts on their behalf because they’re ultimately the ones who are typically underwriting the cost of the of the medicine for the patients, the consumers who are beneficiaries of their plans that are supported by those organizations,” he said. “That is often lost in terms of how this mechanism works, and it's critical to understand this.”

Drug prices, he continued, are set too high in comparison to the rest of the world. The rebates that PBMs negotiate are very significant and are passed back to the payers, and it is the payers that choose how what to do with those rebates. He specifically called out the price of GLP-1 therapies, which treat patients with diabetes and obesity. “One drug, which costs $900 in the U.S. costs about a 10th of that in Europe. Pharmacy benefit managers play a vital role in holding those prices down, which is why drug companies and their allies have spent the past several years attacking them.”

Last year, the company’s Optum Rx passed through more than 98% of rebates and discounts the negotiated with drug companies their clients, and the company offers clients a 100% pass through options.

Witty said that beginning today, UnitedHealth Group has made a commitment to transparency. During the call, he made a commitment to pass through 100% of rebates they manage by 2028. “Unfortunately, even just that small residual that we retain because those clients want to pay us that way, is enough to give people the excuse to argue that the system is not working properly. We’re taking that excuse off the table.”

He said the company will continue to encourage all of its clients to fully pass these savings directly to patients at the point of sale. “This will help make more transparent who is really responsible for drug pricing in this country — the drug companies themselves.”

Optum Rx saw revenue in 2024 increase by 15% to $130 billion, company executives said in the investor call. The number of adjusted scripts grew to 1.62 billion, compared with 1.54 billion in 2023. UnitedHealth Group executives expect 2025 revenue for Optum Rx to grow to $146 billion.

During his prepared remarks, Witty acknowledged the healthcare system is confusing and complex, and more needs to be done to improve quality and health outcomes while lowering costs for patients. He believes there are opportunities to improve the system through value based care.

“The mission of this company, why we exist, is to improve this system for everybody and help people live healthier lives,” he said. “That means getting more people into high-quality, value-based care and keeping them healthy in the first place, so fewer Americans find themselves with a chronic and in many cases, preventable disease."