AMA Report Highlights Market Concentration Among PBMs and Calls for Greater Transparency
The American Medical Association (AMA) has released a report highlighting the dominance of four pharmacy benefit managers (PBMs) in the U.S. market, controlling about two-thirds of the market share across rebate negotiation, retail network management, and claims adjudication services as of 2023. This high concentration is linked to concerns about antitrust implications and reduced competition in pharmaceutical benefits management. Increased vertical integration between insurers and PBMs, where insurers own or control PBMs, adds complexity and further concentrates market power. The report notes that in 2023, 77% of prescription-drug plan enrollees, covering both commercial and Medicare Part D, were part of vertically integrated entities, with the concentration higher in Medicare Part D plans than in commercial markets.
Market consolidation impacts transparency and competition, leaving smaller insurers, employers, and patients with limited choices. The lack of pricing clarity in drug costs complicates consumer understanding and contributes to rising drug prices. The AMA attributes rising drug prices and patient access issues to PBMs operating with opaque business practices lacking accountability. Vertical integration also threatens independent insurers' ability to compete and risks lowering reimbursements to pharmacies, particularly smaller and independent chains.
The AMA advocates for increased regulatory oversight and systemic reforms to enhance transparency and accountability in PBM operations. It notes that some policymakers are responding, citing Arkansas's 2026 law prohibiting PBMs from owning pharmacies within the state as an example. Recent federal budget measures aimed at improving PBM transparency were omitted from the final legislation, but nearly 40 state attorneys general have urged Congress for similar actions.
The AMA’s ongoing TruthinRx campaign continues to push for comprehensive reforms to address market concentration, anticompetitive behavior, and patient protections within the pharmaceutical supply chain. These developments are critical for U.S. insurers, health plan administrators, and regulators monitoring the dynamics of market competition and its effects on drug pricing, access, and healthcare costs.