The top three PBMs in the country currently—CVS Caremark, Express Scripts, and Optum Rx—processed nearly 80 percent of the nearly 6.6 billion prescriptions dispensed in 2023. But these big PBMs aren’t standalone companies; they are integrated into massive corporate conglomerates that encompass some of the country’s largest health insurance providers and also pharmacies, including specialty pharmacies, mail-order pharmacies, and, in the case of Caremark, one of the country’s largest retail pharmacy chains. Most recently, these huge conglomerates have even moved into the business of private drug labeling, partnering with drugmakers to distribute drugs themselves under different trade names.
A concentrated business sector. It is easy to conclude with such a small number.
In the FTC’s investigation so far, the commission found evidence that PBMs are steering people toward their affiliated pharmacies—hurting small, independent pharmacies—and allowing their affiliated pharmacies to rake in payments “grossly in excess” of average drug costs. For instance, for two generic cancer drugs (one for prostate cancer and the other for leukemia), pharmacies affiliated with the top three PBMs collectively raked in nearly $1.8 billion in revenue from 2020 to 2022. That represents an excess of revenue of $1.6 billion dollars over the national average cost for the drugs. In other words, pharmacies not affiliated with the top PBMs would have otherwise seen revenue of under $200 million for the same drug dispensing.