A new study published in JAMA Health Forum reveals the substantial market control exercised by major insurer-pharmacy benefit manager (PBM) firms in the Medicare Part D sector, raising concerns about market competition and patient choice.
Market Dominance in Medicare Part D
Analysis of 2021 Medicare Part D claims data shows that pharmacies owned by four major insurer-PBM conglomerates - CVS, Cigna, Humana, and UnitedHealth Group (UHG) - account for 34.1% of all pharmacy spending. The concentration is even more pronounced in specialty pharmacy spending at 37.1%, while nonspecialty pharmacy spending stands at 32.1%.
The study, examining data from over 10.4 million patients, found particularly high concentration in certain specialty drug categories. Notably, insurer-PBM owned pharmacies handle 89.7% of claims for pulmonary arterial hypertension and idiopathic pulmonary fibrosis medications, 64.8% for multiple sclerosis drugs, and 41.1% for disease-modifying antirheumatic drugs.
Evidence of Patient Steering
Despite Medicare Part D's "any willing pharmacy" regulations, researchers uncovered strong evidence of patient steering practices. The analysis revealed that 91.0% of specialty drug claims and 99.8% of nonspecialty claims were filled at insurer-PBM pharmacies at higher rates than expected in a neutral market.
The steering effect varied among companies:
- Cigna showed the highest steering differential for specialty drugs at 21.7 percentage points
- Humana followed at 18.9 percentage points
- CVS and UHG demonstrated lower but still significant steering at 13.9 and 11.9 percentage points respectively
Market Implications and Concerns
These findings raise significant questions about market competition and patient choice in the Medicare Part D program. While insurer-PBM owned pharmacies may offer benefits such as improved access and potentially lower costs, their dominant market position and steering practices could limit competition and restrict patient options.
The researchers emphasize that this market concentration varies significantly across therapeutic categories and geographic regions, suggesting the need for targeted regulatory approaches. The study's findings are particularly relevant as regulatory scrutiny of insurer-PBM integration intensifies across the healthcare sector.
