Study looks at market competition and vertical integration in PBM industry

New research published in JAMA finds a deep concentration of PBM services are evident across all three payer markets, especially Medicare Part D. The research team, led by Dima Qato, PharmD, from the University of Southern California, Los Angeles, found that Medicare Part D, along with Medicaid, was dominated by Optum Rx and CVS Caremark, while Express Scripts gravitated toward the commercial market.

The market dominance of a handful of large PBMs across payers has important antitrust implications, the study authors conclude, particularly in the context of escalating costs and pharmacy shutdowns.

“These findings could inform federal policies, including proposed legislation that would prohibit unfair and deceptive PBM business activities and the Federal Trade Commission’s ongoing investigation of PBM anticompetitive practices,” they write.

The research findings come against a backdrop of concern about PBMs’ foothold in the prescription drug market.

The dataset included 14 billion prescriptions filled last year at U.S. community pharmacies and processed through 91 market middlemen, three of whom—CVS Caremark, Express Scripts, and Optum Rx—accounted for more than three-quarters of the overall volume.

“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,” said Bruce A. Scott, MD, AMA president, in a news release. “The findings from the new AMA analysis warrant attention as Congress and the administration continue their work to protect patients and ensure prescription drugs remain affordable and accessible.”