AMA analysis: PBM market concentration continues to rise

CHICAGO – A small number of pharmacy benefit managers (PBMs) account for an increasingly large share of the national market, according to the American Medical Association’s (AMA) annual analysis.

The top four PBMs collectively had 75% share of the national-level PBM market in 2024, an increase from 70% in 2022, according to the analysis.

“Competitive PBM and prescription drug plan markets help patients get the medications they need at a fair price,” said AMA President Willie Underwood III, MD, MSc, MPH. “But our analysis shows that a small number of PBMs account for a growing share of the market, while most local PBM markets remain highly concentrated and most prescription drug benefits are managed by vertically integrated insurers and PBMs. These trends warrant closer scrutiny, greater transparency and stronger accountability to ensure PBM markets serve patients rather than reinforce the market power of large healthcare companies.”

Key findings from the analysis include:

• In 2024, the four largest PBMs by national market share were OptumRx (23%), Express Scripts (23%), CVS/Caremark (18%) and Prime Therapeutics (11%).
• In 2022, the top four were CVS/Caremark (21%), OptumRx (21%), Express Scripts (17%) and Prime Therapeutics (10%).
• Among these companies, Express Scripts had the largest increase, rising from 17% in 2022 to 23% in 2024. CVS/Caremark had the largest decrease, shrinking from 21% in 2022 to 18% in 2024.
• Locally, 94% (32) of PBM markets were highly concentrated in 2024 according to thresholds set by federal antitrust guidelines, an increase from 82% (28) in 2022.

The analysis also found significant vertical integration, with each of the 10 largest PBMs sharing ownership with health insurers.

• Nationally in 2024, 69% of people with commercial or Medicare Part D prescription drug coverage were enrolled with an insurer that was vertically integrated with a PBM.
• The vertically integrated share was higher in Part D than in commercial insurance (73% vs. 67%).
• Locally in 2024, an average of 67% of people with prescription drug insurance were covered by an insurer that shared ownership with a PBM.
• There was wide variation among local regions with some having little vertical integration between insurers and PBMs, while others are almost entirely vertically integrated.

The AMA findings add to recent research indicating the acquisition of PBMs by health insurers can harm consumers by increasing costs, limiting competition and creating incentives to favor the insurer's own interests. Insurer acquisition of PBMs was shown to be associated with higher premiums for competing health plans, with no evidence that savings from the acquisition were passed through to enrollees as lower premiums. The Federal Trade Commission (FTC) has also raised concerns about how PBM concentration and vertical integration can affect independent pharmacies and patients’ access to prescription drugs.

Read the analysis here.

• Related reading: The Federal Trade Commission has published an interim report that underscores the impact pharmacy benefit managers have on accessibility and affordability of prescription drugs.