The Big Three PBMs

PBM Basics · 7 min read

Three vertically integrated corporations dominate the PBM industry, each combining pharmacy benefit management with health insurance, pharmacy retail, and healthcare delivery. Understanding their structures is critical for evaluating their incentives.

CVS Caremark (CVS Health)

CVS Caremark is the largest PBM by prescription volume, processing over 2 billion adjusted claims annually. Its parent company, CVS Health, also owns Aetna (health insurer), CVS Pharmacy (the nation's largest retail pharmacy chain), CVS Specialty, and Signify Health (home health). This structure means that when an Aetna member fills a prescription at CVS Pharmacy through CVS Caremark, every dollar flows within a single corporation.

Express Scripts (Cigna / The Cigna Group)

Express Scripts processes approximately 1.4 billion adjusted claims annually. Acquired by Cigna in 2018 for $67 billion, it operates within The Cigna Group alongside Cigna Healthcare (insurance) and Evernorth Health Services. Express Scripts pioneered many PBM practices including formulary exclusion lists and mandatory mail-order programs. Its Accredo specialty pharmacy is among the largest in the country.

OptumRx (UnitedHealth Group)

OptumRx is the PBM subsidiary of Optum, which itself is part of UnitedHealth Group alongside UnitedHealthcare (the nation's largest health insurer). OptumRx processes roughly 1.4 billion adjusted claims annually. UnitedHealth Group's integration extends further than its competitors, with Optum also operating physician practices (Optum Health), ambulatory surgery centers, and a healthcare bank (Optum Financial).

Market Concentration Effects

Together, the Big Three process approximately 80% of all prescriptions in the United States. This concentration affects every part of the supply chain. Pharmacies have limited alternatives when negotiating reimbursement rates. Manufacturers must secure formulary access with these three PBMs to reach the majority of insured patients. Employers face a narrow competitive field when evaluating PBM partners.

Several mid-market PBMs offer alternatives, including MedImpact, Navitus, RxBenefits, Capital Rx, and others. These organizations often position themselves on transparency and lack of vertical integration, though they typically lack the claims volume to match the negotiating leverage of the Big Three.

Key Question for EmployersDoes vertical integration benefit your plan through efficiency, or does it create conflicts where your PBM profits from directing your members to its own pharmacies and health plan?