Vertically Challenged? PBM Clients Sour on Firms’ Deepening Diversification

By Leslie Small

Satisfaction with pharmacy benefit managers has reached its lowest point in 15 years — and one of the newer factors driving the discontent may be the significant market power and vertical integration that the three largest PBMs have gained.

“I think the…well-documented traditional issues, like opaque business practices, conflicts of interest — most notably, owning pharmacies that dispense or capture approximately 40% of the total dispensing revenue in the U.S. — those are still the primary drivers” of ill will toward PBMs, Michael Londergan, R.Ph., president at Pharmaceutical Strategies Group said during a recent webinar held to discuss the findings of PSG’s annual PBM Customer Satisfaction Report.

“However, I believe those issues have been inflamed recently by higher [cost] trends driven by the GLP-1s for diabetes and obesity; I liken it to just throwing a bunch of gasoline on a smoldering fire,” Londergan continued. He pointed out that the “Big Three” PBMs — CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx — are seeing even lower levels of satisfaction than the industry at large, and “most likely that is because they are the most conflicted, as they have, effectively, an oligopoly based on their concentration of market power.”

The Big Three control about 80% of the pharmacy claims processed in the U.S., and concern about their market power “is further supported by their vertical integration with the large national health plans, plus their ownership of the three primary rebate group purchasing organizations [GPOs], and the aforementioned ownership of dispensing pharmacies,” Londergan added. As a result, “scrutiny is super high, and the Big Three PBMs in particular are the focus of legislators, regulators — and are often seen as sort of a poster child or symbol of industry dysfunction.”

According to the PSG’s annual report, overall PBM satisfaction was already at a decade-long low in 2024, but it dropped even lower in 2025: from 7.6 on a 10-point scale to 7.1. In addition, the Net Promoter Score that respondents gave PBMs – a common measure of customer satisfaction across industries – this year dipped for the first time into the negative range of a -100 to 100-point scale. The overall -12 NPS earned by PBMs represents a significant drop from the 38 notched by the industry in 2021 – a relative high point that may have been due to “positive impressions of PBMs’ actions during the early part of the COVID-19 pandemic.”

The report, however, notes that “overall scores and trends can mask important group differences, and deeper analysis revealed discrepancies based on plan sponsor type and PBM size.”

For example, customers of non-Big Three PBMs reported higher satisfaction on most items compared to customers of Caremark, Express Scripts and Optum Rx, the PSG report noted.

And although both types of PBM clients surveyed — employers and health plans — reported declining satisfaction in areas such as drug discounts, formulary management and responsiveness/issue resolution, employers are still consistently reporting higher satisfaction than health plans on most items.

However, while employers “continued to have higher overall satisfaction with their PBMs…their satisfaction declined more precipitously than that of health plans” from 2024 to 2025 — 7.9 to 7.4 for employers, compared with 6.8 to 6.6 for health plans.

Employers May Eye Diversification Skeptically

During the webinar, Michael Medel, Pharm.D., who is PSG’s senior vice president and plan sponsor practice lead, said vertical integration concerns may also be what’s behind employers’ deepening dissatisfaction with PBMs.

Not only do the largest PBMs own major drug-dispensing channels such as retail, specialty and mail-order pharmacies, they also have their own rebate-aggregating GPOs, Medel observed. (CVS Caremark has Zinc Health Services, Cigna has Ascent Health Solutions, and UnitedHealth has Emisar Pharma Services.) Additionally, the three largest PBMs proffer utilization management (UM) services, and they have now branched out into marketing/manufacturing of biosimilars via their subsidiaries Cordavis (CVS), Quallent Pharmaceuticals (Cigna) and Nuvaila (UnitedHealth).

“We’re living in an environment where some of the PBM-created programs are struggling to really help employers manage their spend,” Medel said. The dominant PBM business model also “discourages customized UM practices that might be more suitable for an individual employer,” he contended. For instance, if an employer chooses to cover a GLP-1 drug for weight loss, the firm is often required to use UM criteria that a PBM developed for its entire line of business, rather than a customized solution.

“Further, some PBMs are even mandating where those GLP-1 drugs can be dispensed,” preferring PBM-owned pharmacies or a network where a PBM may have a special arrangement, Medel said. “Whether real or perceived, those factors that I just mentioned — along with pharmacy cost trends being really high — leads to a skepticism in the employer market that some of the vertical integration might result in self-serving opportunities, which may or may not be in the employer’s best interest.”

When it comes to how PBMs are approaching biosimilars, meanwhile, the PSG survey revealed that clients’ views are nuanced. After initially putting follow-on products of AbbVie’s blockbuster immunosuppressant drug alongside the reference drug on their formularies, the three major PBMs shifted to prefer biosimilars over the brand and in some cases exclude the reference product – often in favor of their own white-label subsidiary’s version.)

The majority of survey respondents told PSG that their PBM’s strategy regarding Humira (adalimumab) biosimilars provided at least moderate value – which Medel described as a “somewhat positive result.” However, “the story gets more complicated when we think about how that value is actually being provided,” he said. “Some PBMs are now involved in the manufacturing of Humira biosimilars, and they’re structuring their formularies to require that those particular biosimilars are used. This has raised concerns about conflicts of interest.” PSG found that nearly 90% of respondents were aware of such practices, and the majority were at least “moderately concerned” by them.

“If we take this together, we can see these Humira biosimilar strategies are provided value, and customers are seeing that, but they’re questioning, ‘at what cost?’” Medel concluded.