PBMs and Vertical Integration: CBO Adds to Growing Concerns About Negative Impacts

  • Aug 22, 2024

    The Congressional Budget Office raised concerns about the potential harms of joint ownership of pharmacy benefits managers, health insurance companies and pharmacies in new responses to U.S. lawmaker questions, adding to the chorus of scrutiny that may be building toward 2025 congressional action against vertical integration in the health sector.

    Insurance company and PBM mergers “tends to lower the prices paid for drugs” and “reduce spending on drugs for patients in vertically integrated health insurance plans,” the CBO found, but any reductions in spending by the plan may not be passed on to enrollees in the form of lower premiums.

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  • Sarah Karlin-Smith

    Sarah is a senior writer with Pink Sheet and has covered U.S. regulation and reimbursement policy for the biopharma industry since 2004, starting with the establishment of the Medicare Part D program. Since then, she has written extensively about developments in all major sectors of the U.S. insurance market (Medicare, Medicaid and commercial plans). She has covered key legislation affecting biopharma, including the Medicare Prescription Drug, Improvement, and Modernization Act which created Part D, health care reform under President Obama, and the Inflation Reduction Act. She has closely followed the increasing influence of pharmacy benefit managers and their use of formulary negotiations and rebates to control pricing. Cathy also has covered developments in health technology assessments and has monitored industry progress on novel drug contracting that reflects value-based pricing.

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