New AMA report highlights the lack of competition in the PBM market
A new analysis by the American Medical Association (AMA) adds to growing evidence detailing the lack of competition and high vertical integration of the pharmacy welfare manager market.
The paper is based on data on prescription drug program participants in 2022 and 2023 and shortly after the Federal Trade Commission and the U.S. House Oversight and Accountability Committee released similar reports on PBM.
AMA found that optumrx is the largest PBM in the United States in 2023, accounting for 22.2% of the kickback negotiation market, followed by CVS Caremark with a market share of 18.9%, clear scripts with 15.5%, market share of 15.5%, and quality treatment place share of 10.6%. Together, these four PBMs account for 67% of the national PBM market in 2023.
According to AMA, insurers’ vertical integration with PBM is also serious in 2023, with 77% of commercial and part D participating in vertical integration of insurance companies, insurers and PBM in prescription drug plans. When looking at only Part D prescription drug plans, 88% are in one plan with vertical integration plans, compared to 71% for business.
In addition, there are 9 out of the 10 largest PBMS ownership with health insurance companies. These include optumrx (owned by UnitedHealth), CVS Caremark (owned by CVS Health), and Express Scripts (owned by Cigna).
UnitedHealth Group is the largest prescription drug planning insurer in the commercial market and the Medicare Advantage market with shares of 13.2% and 29.4% respectively. Meanwhile, CVS Health is the largest prescription drug planning insurance company in the independent market with a share of 27.2%.
“As PBMs increasingly act in their own self-interest, without transparency or accountability, and drug prices rise, patients face health risks of over-cost drug treatment,” AMA President Bobby Mukkamala, MD, MD, said in a statement. “The AMA’s analysis is designed to provide insights to help policy makers understand the anti-competitive situation in the PBM market that could harm patients.”
Mukkamala added that AMA supports programs designed to increase transparency and keep pharmacy welfare managers accountable.
At the federal level, several bipartisan bills against PBM have been proposed. These include the PBM Reform Act proposed by Rep. L. “Buddy” Carter (R-Georgia) in July, which aims to prohibit the spread of pricing in Medicaid. Elizabeth Warren (D-Massachusetts) and Josh Hawley (R-Missouri) also had a Patient before the Monopolies Act (R-Missouri) proposed in December, which would ban PBMS from owning a pharmacy.
Photo: z_wei, Getty Images
