Vertical Integration
The three largest PBMs are each embedded within vertically integrated healthcare conglomerates that combine insurance, pharmacy retail, specialty pharmacy, healthcare delivery, and data analytics under single corporate ownership. This structural reality shapes every aspect of pharmacy benefit management.
The Integration Map
| Parent | PBM | Insurer | Pharmacy | Other |
|---|---|---|---|---|
| CVS Health | CVS Caremark | Aetna | CVS Pharmacy, CVS Specialty | MinuteClinic, Signify Health, Oak Street Health |
| Cigna / Evernorth | Express Scripts | Cigna Healthcare | Accredo, Freedom Fertility | MDLive, CareAllies |
| UnitedHealth Group | OptumRx | UnitedHealthcare | Optum Specialty, Genoa | Optum Health (60,000+ physicians), Optum Financial |
Efficiency vs. Conflict
Proponents argue that vertical integration creates efficiencies: better data sharing between the insurer and PBM, streamlined patient experiences, coordinated care management, and reduced administrative overhead. When the insurer and PBM share data, clinical programs can be more targeted and effective.
Critics argue that integration creates unresolvable conflicts of interest. When a PBM directs patients to pharmacies it owns, it profits from the dispensing margin in addition to its PBM fees. When the parent company's insurer steers members to the parent company's PBM, competitive pressure diminishes. Internal transfer pricing between subsidiaries can obscure true costs from plan sponsors.
Implications for Employers
For self-insured employers, vertical integration means that evaluating a PBM requires understanding the parent company's entire economic model, not just the PBM contract terms. Audit rights, data access, and network steering provisions take on additional significance when your PBM has a financial interest in where and how prescriptions are filled.