UnitedHealth’s new pharmacy care model and Goldman’s bullish rating highlight confidence in its Medicare Advantage underwriting cycle recovery.
Goldman Sachs added UnitedHealth Group (NYSE:UNH) to its US Conviction list on May 1, assigning a Buy rating and a $435 price target. The firm cited expectations that the company is nearing the bottom of its Medicare Advantage underwriting cycle, which accounts for 40% of its business.
UnitedHealth also announced a new pharmacy care model through Optum Rx, replacing traditional pricing with a transparent, fee-based structure. The model aims to eliminate spread pricing by charging clients fixed monthly fees per member, independent of manufacturers’ list prices or prescription volume.
The developments follow UnitedHealth’s broader strategy to align incentives with patients and plan sponsors, potentially improving cost transparency and predictability for clients.