Becker's ASC Review

10 ASC MANAGEMENT The growing grip of PBMs on physician practice By Patsy Newitt F our pharmacy benefit managers now control more than two-thirds of the market that determines which drugs are available, how much they cost, and how they're reimbursed, according to a July report from the American Medical Association. The AMA's "Competition in PBM Markets and Vertical Integration of Insurers with PBMs: 2025 Update" paints a stark picture of shrinking competition, rising vertical integration and mounting frustration for physicians and patients alike. In 2023, OptumRx, CVS Health, Express Scripts, and Prime Therapeutics managed about 67% of rebate negotiations, one of the most influential levers in drug pricing. Similar levels of concentration were found across other PBM services, from retail network management to claims adjudication. For physicians, this isn't just an abstract market shift. It affects how easily they can prescribe medications, how much their patients pay out of pocket and how long treatment takes to begin, according to the AMA report. "The biggest disruption in my practice are the rampant medication prior authorization denials from the pharmacy benefit managers employed by both commercial and governmental insurance companies/entities," Christopher Magiera, MD, gastroenterologist in Oshkosh, Wis., told Becker's. "This negatively impacts patient care." Federal lawmakers have raised similar concerns. A 2024 House Committee on Oversight and Accountability investigation found that PBMs, while promising to control costs, often steered patients toward higher-priced drugs and affiliated pharmacies. Express Scripts, for example, told patients they would pay more to fill at their local pharmacy but less if they used its mail-order pharmacy. Legal challenges have followed. In November, GoodRx and PBMs CVS Caremark, Express Scripts, MedImpact and Navitus Health Solutions faced class-action lawsuits alleging they suppressed reimbursements to independent pharmacies for generic drug prescriptions. The AMA report also underscores how tightly PBMs are tied to insurers. By 2023, 77% of prescription-drug plan enrollees were covered by vertically integrated entities, a figure that rose to 88% in Medicare Part D. In practice, this means the same company that provides insurance often controls the PBM that negotiates rebates, manages pharmacy networks and processes claims, according to the AMA. That overlap reduces physician leverage when insurers deny coverage and leaves fewer alternatives for patients. As PBMs consolidate, physicians face narrower formularies, more prior authorization hurdles and shrinking reimbursements for independent pharmacies. For private practices, that can mean hours spent appealing drug denials. For larger systems, it may mean absorbing higher costs or shifting them to patients. State policymakers have moved more aggressively than the federal government to rein in PBMs: • Arkansas passed a law banning PBMs from owning or operating pharmacies, effective in 2026. • Iowa enacted Senate Bill 383, curbing PBM cost- sharing practices and mandating reimbursement based on state or national drug price averages. • Alabama's Community Pharmacy Relief Act bans PBM steering to affiliate pharmacies and spread pricing. • Illinois approved a law requiring PBMs to pass rebates to insurers and banning steering practices, while also levying up to $25 million in annual fees. Federal action has been limited so far. PBM transparency provisions included in an early draft of the 2025 budget- reconciliation package were stripped from the final law. Some health systems are taking matters into their own hands. Salt Lake City-based Intermountain Health, through its insurance arm Select Health, rebranded its PBM as Scripius in a bid to gain greater control over prescription costs, improve transparency, and cut inefficiencies. Still, the AMA warns that without stronger oversight, consolidation will continue to concentrate power in the hands of a few vertically integrated giants. n "e biggest disruption in my practice are the rampant medication prior authorization denials from the pharmacy benefit managers employed by both commercial and governmental insurance companies/entities." - Christopher Magiera, MD

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