The AMA's latest annual analysis assessed competition in PBM markets based on three functions for which insurers typically hire an external PBM — rebate negotiation, retail network management and claims adjudication. Among its findings:

The four largest PBMs collectively have a 70% share of the national market.
CVS Health is the largest PBM with a 21.3% market share, followed by OptumRx (20.8%), Express Scripts (17.1%) and Prime Therapeutics (10.3%).
At the local level, the average PBM market is highly concentrated, according to federal antitrust guidelines.
Eight-two percent of prescription drug benefit region-level PBM markets are highly concentrated. This indicates that only a few PBMs supplied insurers with services and suggests low competition.

The analysis also found significant vertical integration between insurers and PBMs:

Nationally, insurers that are vertically integrated with a PBM covered 72% of people with a commercial or Medicare Part D prescription drug benefit.
The share of people covered by an insurer that is vertically integrated with a PBM is higher in the Medicare Part D market (77%) than the commercial market (69%).
At the prescription drug benefit region level, an average of 70% of people are covered by an insurer that is vertically integrated with a PBM.
There is wide variation across prescription drug benefit regions, with some having little vertical integration between insurers and PBMs, while others are almost entirely vertically integrated.

Instant Insights /

Competition low, vertical integration high in PBM industry, AMA analysis finds

More From HR Executive

Related Stories

Recommended For You