Most state and city-level drug markets are highly-concentrated, with one pharmacy benefit manager controlling a large share of the market, a new report from the American Medical Association found.
The report, published Oct. 13, used 2020 data from individuals with commercial drug benefits tied to medical benefits. The report does not include data from Medicare and Medicaid.
The analysis found 3 out of 4 states have highly-concentrated PBM markets, and 4 out of 5 metropolitan areas had highly-concentrated markets.
Other findings of note from the study:
- Express Scripts had the largest nationwide market share of any PBM, at 22 percent. OptumRX had a 17 percent share and Prime Therapeutics had 15 percent.
- The 10 largest PBMs control 97 percent of the commercial drug market, and the four largest PBMs control around 66 percent.
- Payers that were vertically integrated with a PBM cover around 69 percent of people with commercial drug insurance.
- The share of vertically integrated PBMs varied across states. South Dakota had the lowest rate of vertical integration, with 6 percent of the PBM market share vertically integrated with an insurer. North Carolina had the highest rate, at 97 percent.
- The report found UnitedHealthcare is the largest commercial drug insurer, followed by Kaiser Permanente and Elevance Health (Anthem).
The AMA has raised concerns about the integration of payers and PBMs in the past, writing to the Federal Trade Commission in April to urge "careful monitoring" of integration and consolidation in the PBM space.
"PBM markets require careful scrutiny as less competition and more vertical integration can embolden anti-competitive business practices to the detriment of patients," AMA President Jack Resneck Jr., MD, said in a news release.
Read the full report here.