Does PBM Market Share Vary by Payer Type?

A paper by Qato et al. (2024) quantifies the degree of of pharmacy benefit manager (PBM) market concentration.

Across all payer types, the PBM market was highly concentrated, with an HHI [Herfindahl Hirschman Index (HHI)] of 1972…the HHI was lowest in commercial insurance (1940), with 90 PBM participants, and highest in Medicare Part D (2399), with 21 PBM participants.

Three PBMs dominate in most all markets. In fact, these three large PBMs (CVS Caremark, Optum Rx, and Express Scripts) account for 73.6% of retail prescriptions filled. This does vary 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, approximately twice its share in Medicaid (12.3%) and Medicare Part D (15.4%). Optum Rx and SS&C Health accounted for a greater share of the Medicare Part D market (27.7% and 16.2%, respectively) compared with commercial (16.4% and 2.9%) or Medicaid (15.8% and 1.2%) markets.

You can read the full article here.