(Press-News.org) Just three pharmacy benefit managers (PBM) dominate retail prescriptions in Medicare Part D and Medicaid managed care across much of the country, with markets in in nearly every state considered highly concentrated for at least one program, according to a new study from the USC Schaeffer Center for Health Policy & Economics.
The study, published Feb. 6 in JAMA Health Forum, provides one of the most detailed examinations to date of PBM competition within states. Based on a federal antitrust index, the authors find:
40 states have highly concentrated PBM markets within Part D, and 37 states have highly concentrated Medicaid managed care markets.
Both Part D and Medicaid managed care PBM markets are highly concentrated in 31 states. This includes 10 states that also have highly concentrated commercial insurance markets.
93% of Medicaid managed care prescriptions and 75% of all Part D prescriptions are filled in states where those PBM markets are highly concentrated.
(See the online version of this release for an interactive map with state-specific details).
The study comes as policymakers and regulators continue to scrutinize industry practices over concerns about how these middlemen contribute to higher drug costs, pharmacy closures and restricted patient access to medicines. The spending package passed by Congress earlier this week includes new restrictions on industry practices, and states have been increasing regulation of PBMs in recent years.
“When a few PBMs dominate a market, they hold outsized power over how much patients pay for drugs, where they can fill their prescriptions and whether their essential medications are covered,” said lead author Dima Mazen Qato, a senior scholar at the Schaeffer Center and the Hygeia Centennial Chair at the USC Mann School of Pharmacy and Pharmaceutical Sciences.
“These findings can guide federal and state policies to improve PBM accountability and transparency, particularly in Medicare Part D and Medicaid. They can also inform ongoing efforts to address PBM market concentration, including recently enacted legislation, new regulatory proposals, and federal enforcement actions focused on PBM conduct.”
About this Study
The study was co-authored by Yugen Chen and Karen Van Nuys. Please see the study for author disclosures.
END
PBM markets for Medicare Part D or Medicaid are highly concentrated in nearly every state
2026-02-09
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