The four largest pharmacy benefit managers in the U.S. controlled 75% of the national market in 2024, up from 70% in 2022, a new report from the American Medical Association (AMA) found.
Moreover, the concentration of PBM markets increased from 82% in 2022 to 94% in 2024—which the report notes is due to thresholds set by federal antitrust guidelines. Analysts used 2024 data from the Decision Resources Group (DRG) on PBMs and prescription drug plans (PDPs).
AMA President Willie Underwood III, M.D., said in a statement that competitive PBM and PDP markets “help patients get the medications they need at a fair price.”
“But our analysis shows that a small number of PBMs account for a growing share of the market, while most local PBM markets remain highly concentrated and most prescription drug benefits are managed by vertically integrated insurers and PBMs,” Underwood said. “These trends warrant closer scrutiny, greater transparency and stronger accountability to ensure PBM markets serve patients rather than reinforce the market power of large healthcare companies.”
According to the analysis (PDF), the four largest PBMs by national market share were UnitedHealth Group's OptumRx (23%), Express Scripts, a Cigna subsidiary, (23%), CVS Health's Caremark (18%) and Prime Therapeutics, which is jointly owned by multiple Blues plans, (11%).
Among these companies, Express Scripts had the largest increase, rising from 17% in 2022 to 23% in 2024. CVS/Caremark had the largest decrease, shrinking from 21% in 2022 to 18% in 2024.
The report also examined industry vertical integration and found that payers vertically integrated with PBMs covered 69% of people across both commercial plans and Medicare Part D nationally in 2024. Vertical integration shares were higher in Part D (73%) than in commercial insurance (67%), the analysis notes.
In terms of drug insurer market shares, UnitedHealth Group was the largest payer offering prescription drug benefits in both commercial (14%) and Medicare Advantage PDP (30%) markets. Kaiser, meanwhile, was the second largest drug insurer in the commercial market (10%) and Humana was second in the Medicare Advantage PDP market (19%).
The findings in this study highlight whether proposed or consummated mergers among PBMs and between insurers and PBMs should raise antitrust concerns. "In theory, there could be benefits from high concentration in PBM markets—for example, if large PBMs were to obtain larger rebates and pass them through all the way down to insured consumers as lower premiums or out-of-pocket costs. However, high concentration may also lead to higher prices paid by insurers for PBM services, higher insurance premiums, PBMs not fully passing rebates through, and lower reimbursement to pharmacies," the report authors wrote.
"Thus, empirical evidence is needed to shed light on the actual effect on consumer welfare,” the report said.