PBM Power Play: AMA Report Reveals How Vertical Integration Drives Up Costs and Hurts Pharmacies

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PBM Vertical Integration and Pharmacy Reimbursement

The American Medical Association (AMA) has just confirmed what independent pharmacies and patient advocates have been sounding the alarm about for years: pharmacy benefit managers (PBMs) are too powerful—and patients are paying the price.

A new AMA report shows that just four PBMs now control over two-thirds of the market. Even more concerning, most of them are tightly linked to major health insurers through vertical integration. This combination creates a dangerous lack of competition that leads to higher prescription drug costs, restricted access to care, and shrinking reimbursement rates for pharmacies.

BenefitsPRO Online Article – August 1, 2025

What the AMA Report Reveals

The AMA’s analysis of 2022–2023 data highlights just how concentrated the PBM market has become:

OptumRx (owned by UnitedHealth) led with a 22.2% market share in 2023, up from 20.8% the year before.
CVS Caremark followed with 18.9%, down from 21.3%.
Express Scripts (Cigna) held 15.5%, while Prime Therapeutics captured 10.6%.

Together, these four giants now dominate prescription benefit management for millions of Americans. Even worse, 79% of Medicare Part D drug plan regions are classified as “highly concentrated,” according to federal antitrust guidelines.

But the problem doesn’t stop at market share. The report found that:

77% of commercial and Medicare Part D enrollees are in plans where the PBM and insurer are part of the same company.
In Medicare Part D alone, 88% of beneficiaries are in vertically integrated plans.

Why This Matters for Patients and Pharmacies

This high level of integration and consolidation doesn’t just reduce competition—it actively harms both pharmacies and patients.

When PBMs are owned by insurers, they gain control over every part of the prescription drug pipeline. As a result:

They slash reimbursement rates to independent pharmacies.
They restrict pharmacy networks, forcing patients to use PBM-owned mail-order services.
They withhold manufacturer rebates that could otherwise lower drug costs.
They inflate prices behind closed doors, knowing there’s little transparency or oversight.

At RescueMeds, we see this reality firsthand. We fight every day to get injured workers the medications they need—quickly and affordably. But when PBMs are calling all the shots, the system works against patients, not for them.

Government Investigations Back Up the AMA

The AMA’s report isn’t the only one raising red flags. Both the Federal Trade Commission (FTC) and the U.S. House Committee on Oversight and Accountability have launched their own investigations. Their findings echo what the AMA has laid out:

PBMs are manipulating drug prices through opaque pricing schemes.
They limit patient access to vital medications.
They use their power to squeeze out independent pharmacies from the network.

Put simply, the PBM-insurer model is broken—and unchecked.