Investor Presentaiton
Creating a preferred drug list, which is a list of prescription drugs a health plan will
cover for its beneficiaries;
Negotiating prices and rebates with drug manufacturers;
Contracting with pharmacies and collective groups who negotiate on behalf of
pharmacies to create pharmacy networks; and
Drug utilization reviews, which analyze the prescribing, dispensing, and use of
medications.
The United States is the only developed country that uses PBMs for its public health programs.
Certain PBM practices create risks for private insurers and federal and state health
programs
PBMs have merged with other entities to remain competitive and to increase their revenue streams.
Today, the largest PBMs are vertically integrated with the largest health insurance companies and retail
and mail order pharmacies. 2 Some of these large PBMs are contracted to provide pharmacy benefits for
many of Oregon's coordinated care organizations in Medicaid.
Figure 1: Three companies make up 80% of the 2020 market share of claims for PBMs
OptumRx
21%
CVS Caremark
34%
All others 3%
MedImpact 4%
Prime Therapeutics 6%
Express Scripts
25%
Humana 8%
Source: Health Industries Research Companies
PBMs have considerable influence on which drugs are covered by insurers and can require consumers
to get certain prescriptions filled at a specialty or mail order pharmacy, which the PBM may own. CVS
Health, a vertically integrated system, noted in recent financial statements the rebates they receive
from drug manufacturers often depend on whether the PBM places their drugs on a health plan's
preferred drug list. Vertical integration in the pharmaceutical system poses risks of decreased
consumer access to medications and affordability to everyone, not just those receiving Medicaid
benefits.
2 Vertical integration in health care refers to the mergers and acquisitions of companies that offer diversified services and/or
products across a continuum of health care services.
Oregon Secretary of State Report 2023-25 | August 2023 | page 2View entire presentation