An article by Qato and others (2024) quantifies the degree of concentration in the pharmacy benefit manager (PBM) market.
Among all payer types, the PBM market was highly concentrated, with a HHI [Herfindahl Hirschman Index (HHI)] of 1972…the HHI was lowest in commercial insurance (1,940), with 90 PBM participants, and highest in Medicare Part D (2,399), with 21 PBM participants.
Three PBMs dominate in almost every market. In fact, these three major PBMs (CVS Caremark, Optum Rx, and Express Scripts) account for 73.6% of prescriptions dispensed at retail pharmacies. This varies by payer type.
…CVS Caremark alone accounted for 39.2% of PBM services in the Medicaid managed care market, 28.5% in commercial markets, and 33.4% in Medicare Part D, while Express Scripts accounted for 28.0% of the commercial market, roughly double its share in Medicaid (12.3%) and Medicare Part D (15.4%). Optum Rx and SS&C Health accounted for a larger share of the Medicare Part D market (27.7% and 16.2%, respectively) compared to the commercial (16.4% and 2.9%) or Medicaid (15.8% and 1.2%) markets.
You can read the full article here.
