GAO releases study on vertical integration in Part D

On Oct. 5, the Government Accountability Office (GAO) released a report examining how vertical integration among Medicare Part D plan sponsors, PBMs, and pharmacies affects prescription drug utilization, payments, and beneficiary costs. GAO analyzed 2023 Medicare Part D data for four large, vertically integrated plan sponsors, including Express Scripts, and found that payments and cost sharing for at least 94% of 100 most commonly used Part D drugs were lower for their owned pharmacies than for non-owned pharmacies.

Average payments for those medications (primarily generic drugs) to owned and non-owned pharmacies for a 30-day supply were $10 or less. Payments to pharmacies and patient cost sharing were also generally lower at owned pharmacies for the 100 drugs with the highest total payments in 2023 (primarily brand-name drugs).

Overall, owned pharmacies accounted for only 28% of the Part D drugs the plan sponsors provided to their enrollees and about 24% of the total payments to pharmacies.

GAO also reviewed 36 contracts between vertically integrated plan sponsors and pharmacies and found that contracted payment rates and dispensing fees were not consistently higher or lower for owned pharmacies than for non-owned pharmacies.