UnitedHealth Group’s Optum Rx, The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark and Prime Therapeutics together control about 70% of the national PBM market in 2022, according to an American Medical Association (AMA) report released on Sept. 9.

Although the PBM industry’s trade group immediately criticized the report, pointing out that the nation’s largest physician trade group could be biased against PBMs, data from AIS Health’s parent company, MMIT, tells a similar story. And one leading health policy expert tells AIS Health that what the researchers found is “very reasonable” and consistent with other reports on the concentration and vertical integration in the PBM market.

Optum Rx recently revealed that Optum Health Solution’s new biosimilars-focused, private-label subsidiary will join the other two big PBMs’ similar offerings. On Jan. 1, 2025, two Nuvaila-labeled biosimilars will be added to three of its commercial formularies — and for a $0 copay.

Amgen Inc.’s Wezlana (ustekinumab-auub), an interchangeable biosimilar of Stelara (ustekinumab) from Johnson & Johnson Innovative Medicine, will be added to Optum Rx’s commercial formulary on Jan. 1, 2025, the PBM revealed. The agent will be provided as a private-label product from Nuvaila — known as Wezlana for Nuvaila — and will be available in both high-wholesale acquisition cost and low-WAC versions.

The human interleukin-12 and -23 antagonist has approval for all of Stelara’s indications and is available in both subcutaneous and intravenous formulations. It also is latex-free, while Stelara contains a derivative of latex.

The cost of providing health benefits to employees grew more than was projected in 2023 and is expected to rise by an eye-popping rate of 7.8% by 2025, according to an annual survey of large companies from the Business Group on Health. And to address those rising costs, employers are demanding greater accountability from their health plans, PBMs and other vendors.

“Health care costs is really the headline story of this year’s findings,” Ellen Kelsay, Business Group on Health president and CEO, said during an Aug. 20 virtual press briefing. Health care trend — or the rise in spending — was 6.8% in 2023, which was up from 4.6% in 2022 and greater than the 5.9% estimated trend.

The Congressional Budget Office raised concerns about the potential harms of joint ownership of pharmacy benefits managers, health insurance companies and pharmacies in new responses to U.S. lawmaker questions, adding to the chorus of scrutiny that may be building toward 2025 congressional action against vertical integration in the health sector.

Insurance company and PBM mergers “tends to lower the prices paid for drugs” and “reduce spending on drugs for patients in vertically integrated health insurance plans,” the CBO found, but any reductions in spending by the plan may not be passed on to enrollees in the form of lower premiums.

When CMS on Aug. 15 revealed the prices of the 10 drugs subject to Medicare price negotiation, its much-anticipated disclosure still left many questions unanswered. In the managed care world, the biggest question mark remains how Medicare Part D plans will adjust their formularies in reaction to the new government-set prices — but one industry expert says it will be a while before more clarity emerges.

“These prices are effective Jan. 1, 2026, so they should not, in theory, impact the 2025 formularies,” which have been largely decided since April, says Jennifer Snow, founder of the health policy and reimbursement consulting firm Apteka LLC.

So far, 2024 has proven to be an eventful year for publicly traded health insurers — and not always in a good way.

Indeed, during the most recent quarter CVS Health Corp. made waves by adjusting its earnings outlook downward for the third time this year and dismissing the short-tenured president of its Aetna health benefits division due to ongoing Medicare cost pressures.

Other publicly traded firms, including Humana Inc. and Elevance Health, Inc., offered better second-quarter performances, but still saw their share prices fall amid investors’ concerns about how medical costs will shake out in the second half.

While pharmacy benefit managers are no strangers to litigation, in recent weeks there has been a notable uptick in lawsuits that challenge — both directly and indirectly — PBMs’ ability to ensure clients are able to access the lowest possible drug prices. Sources say that as those suits progress, they could wind up shedding greater light on business practices that have caused PBMs to be caught in regulators’ crosshairs.

In mid-July, Vermont Attorney General Charity Clark (D) filed a lawsuit against The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark, and “nearly two dozen affiliated entities,” accusing them of violating Vermont’s Consumer Protection Act by “manipulating the marketplace and reducing access to certain prescription drugs, including lower-cost drugs, through a series of tactics with no transparency in their decision-making process.”

Amid a summertime resurgence of ire directed at major PBMs, CVS Health Corp., The Cigna Group and UnitedHealth Group during their recent earnings calls each took the opportunity to defend their pharmacy benefits businesses and tout their new, more transparent offerings.

When reporting CVS’s second-quarter financial results on Aug. 7, CEO Karen Lynch opened her prepared remarks with the bad news first, revealing that the continued struggles of the firm’s health benefits division led her to cut its 2024 earnings forecast and fire Aetna President Brian Kane. But she then sang the praises of CVS Caremark — as well as hit back at major PBMs’ critics.

A House Committee on Oversight and Accountability hearing on potential PBM reform legislation suggests there remains strong, bipartisan interest in crafting legislation that could have a significant impact on the sector, but also that any substantive actions will not come before next year.

The committee heard testimony from executives of the “big three” pharmacy benefit management companies, CVS Caremark, Express Scripts and United/Optum Rx, at its July 23 hearing on “transparency and accountability.” The hearing was the third in a series from the committee after previous sessions were held in May and September 2023.

Former Wells Fargo employees sued the company on July 30, alleging the financial firm overpaid for prescription medications covered by its prescription drug plan, STAT reported. The proposed class action lawsuit alleges Wells Fargo failed to satisfy its “fiduciary obligations at multiple steps in the process of administering prescription drug benefits” as mandated under the Employee Retirement Income Security Act of 1974, and that it paid excessive fees to The Cigna Group’s Express Scripts PBM. The lawsuit, filed in the U.S. District Court for the District of Minnesota, is similar to one filed in February by a Johnson & Johnson employee. Both suits cited a STAT investigation from June 2023 that detailed the relationship between PBMs and consulting firms, which may raise concerns about conflicts of interest. Wells Fargo and Johnson & Johnson each use Express Scripts as their PBM and Aon as their drug benefits consultant.