The four largest pharmacy benefit managers in the U.S. control 70% of the national market, and most regional PBM markets are highly concentrated, according to new data from the American Medical Association (AMA).
The study dived into 2022 data on commercial and Medicare Part D plans and found that CVS Health's Caremark is the largest PBM, owning 21.3% market share. It's followed closely by UnitedHealth Group's Optum Rx, which has a 20.8% market share, according to the report.
Express Scripts, a Cigna subsidiary and the final of the industry's big three companies, has a 17.1% market share, according to the report. Prime Therapeutics, which is jointly owned by multiple Blues plans, controls 10.3% of the market.
AMA President Bruce Scott, M.D., said in a press release that the findings "warrant attention as Congress and the administration continue their work to protect patients and ensure prescription drugs remain affordable and accessible."
“The call for increased regulatory oversight of PBM business practices is overwhelmingly welcomed by physicians as a check against possible anticompetitive harm resulting from low competition and high vertical integration in the PBM industry,” Scott said. "The AMA urges careful monitoring, and intervention when needed, of both horizontal and vertical integration to ensure competition in PBM and health insurance markets.”
Eighty-two percent of region-level PBM markets would be considered highly concentrated based on federal guidelines. This finding suggests a lack of competition among PBMs, as it indicates relatively few companies provided services to insurers, according to the data.
The study also examined vertical integration in the industry and found that at the national level, payers that are vertically integrated with a PBM covered 72% of people across both commercial plans and Part D. The study found that the number of people enrolled in coverage where the insurer and PBM are integrated was more common in Part D than in the commercial market (77% vs. 69%).
There is also notable variation between markets, with some having limited vertical integration and others being almost fully vertically integrated.
The AMA said in the release that the study "adds to the AMA’s work to shine a light on lack of market competition in the health insurance industry."