Does PBM Market Share Vary by Payer Type? – Healthcare Economist





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.

Graph created based on data from: https://pubmed.ncbi.nlm.nih.gov/39255301/

You can read the full article here.



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