Researchers have discovered that pharmacy benefit managers (PBMs) — organizations that negotiate medication access for the majority of patients in the United States — tend to direct patients towards their affiliated pharmacies. Interestingly, these pharmacies are utilized less frequently by Medicare patients compared to those in other markets. This phenomenon is noteworthy because PBMs are part of larger healthcare entities that also own insurance companies and pharmacies, which can lead to potential conflicts of interest.
Researchers from Weill Cornell Medicine have discovered that pharmacy benefit managers (PBMs) — organizations that manage medication access for most patients in the United States — often channel patients towards their own pharmacies. However, these pharmacies are less frequently utilized by Medicare patients compared to other markets. PBMs operate under larger healthcare conglomerates that own both insurance firms and pharmacies, which can create conflicts of interest.
A study published on January 10 in JAMA Health Forum found that in 2021, about one-third of all pharmacy expenditures under Medicare Part D and nearly 40% of specialty drug expenses within Medicare Part D were through pharmacies controlled by the four largest PBMs: CVS, UnitedHealth Group, Cigna, and Humana. Nevertheless, this represents a considerably lower market share in Medicare compared to the nearly two-thirds market share reported by a 2024 Federal Trade Commission report. These findings could influence future policy decisions regarding the regulation of these entities.
“It’s remarkable that, on average, these companies hold a significantly smaller market share in Medicare than the national figures suggest,” stated Dr. Pragya Kakani, the study’s lead author and an assistant professor of population health sciences at Weill Cornell Medicine. “For high-cost specialty medications, these pharmacies capture almost half the market share in Medicare, yet this is still below the level seen across all other payer segments nationally.”
Dr. Kakani posits that the reason for the diminished market share of these pharmacies within Medicare might relate to the Center for Medicare and Medicaid Services’ “any willing pharmacy” rules, which guarantee patients can access their prescriptions at any pharmacy willing to comply with Medicare Part D’s stipulations.
“While we don’t directly test this idea, our research suggests that these regulations might play a significant role in limiting the market share of PBM firms,” she explained. Outside of Medicare Part D, however, insurers typically have more freedom to exclude certain pharmacies from their networks, leading to fewer options for patients regarding where they can fill their prescriptions.
“In spite of Medicare’s ‘any willing pharmacy’ rules, insurers allied with PBMs can still guide a considerable number of their Medicare Part D plan enrollees towards their own pharmacies,” remarked Dr. Amelia Bond, a senior author on the study and an associate professor of population health sciences at Weill Cornell Medicine. This steering is particularly pronounced with some high-cost specialty medications. On average, Medicare beneficiaries utilized their PBM’s pharmacies at rates nearly 20% higher than would be anticipated in the absence of steering.
For instance, for conditions such as pulmonary arterial hypertension, idiopathic pulmonary fibrosis, and multiple sclerosis, pharmacies owned by PBMs captured over 60% of the market share among Medicare patients. “Given that there is significant variation across different disease categories regarding the prevalence of such pharmacies, policymakers concerned with this matter should focus on drug classes where PBM-owned pharmacies are predominantly used,” they advise.
The influence of PBM pharmacies and their capacity to direct patients to their own establishments can affect costs, accessibility to independent pharmacies, and overall patient experience. Consequently, some states may consider broadening protections similar to “any willing pharmacy” rules in regular commercial markets.
“Steering has the potential to magnify both the risks and benefits arising from this type of integration, warranting additional research in this field,” Dr. Kakani noted. Dr. Kakani, Dr. Bond, and their research team will continue to explore these issues, concentrating on the quality of service provided by PBM-owned pharmacies, which includes access, timely prescription filling, adherence to treatment regimens, and pricing.
