If you have ever tried to figure out why a prescription drug costs what it does, why one pharmacy is preferred over another, or why your insurance plan steers you toward a certain site of care, you have already brushed up against one of the most complicated issues in healthcare: vertical integration.
Vertical integration happens when one company owns or controls multiple parts of a supply chain or system. In health care, that can mean the same parent company owns a health insurer, a pharmacy benefit manager (PBM), and pharmacies, including specialty pharmacies.
Companies may argue that owning multiple parts of the system helps coordinate care, negotiate better prices, and reduce costs. CEO of CVS Health Group David Joyner even suggested that, “it’s a model that works really well for the consumer.” But for patients, independent pharmacies, and providers, vertical integration can also create conflicts of interest and financial incentives that do not always benefit the people trying to access or deliver care.
That is why lawmakers on both sides of the aisle are paying closer attention.
What Does Vertical Integration Look Like?
In the prescription drug system, a PBM helps manage drug benefits for health plans. PBMs negotiate with drug manufacturers, build formularies (the list of drugs covered by an insurer), determine pharmacy networks, and help decide how pharmacies and providers are reimbursed. When a PBM is owned by the same parent company as an insurer and a pharmacy, that company may have influence over many steps in a patient’s prescription drug journey, including what drugs are covered, which pharmacies patients can use, whether extra approval steps are required, and what patients ultimately pay.
While companies may argue that vertical integration makes the system more efficient, patients experience it very differently. When the same company controls the insurance plan, the PBM, and the pharmacy, it may have more opportunities to maximize revenue across the prescription drug process. That can create incentives to steer patients toward affiliated pharmacies, impose additional barriers before treatment is approved, or prioritize corporate profits over patient affordability and access.
Drug Channels Institute’s 2026 mapping of the market shows how deeply connected many of these relationships have become across insurers, PBMs, specialty pharmacies, and other parts of the drug supply chain.
Why Patients Should Care
Most patients do not interact directly with their PBM, or may not even realize what a PBM is. But PBM and insurer decisions can still affect whether a medication is covered, what pharmacy or site of care a patient is encouraged or required to use, how much a drug costs, and whether an independent or specialty pharmacy can continue serving patients in a community.
This is especially important for patients who rely on high-cost medications, specialty drugs, or complex therapies that require coordination among prescribers, pharmacies, insurers, and benefit managers.
When the same corporate parent controls multiple parts of that process, patients may have fewer meaningful choices and may be steered toward pharmacies or sites of care preferred by that same company. That can leave patients navigating higher out-of-pocket costs, disrupted care, pharmacy restrictions, and delays in starting or continuing therapy. Independent pharmacies and practices may also face reimbursement and contracting pressures that make it harder for them to remain open or participate in certain networks. Those concerns are now showing up in congressional hearings, federal reports, and bipartisan legislation.
What the OIG Found
A recent reportfrom the U.S. Department of Health and Human Services Office of Inspector General examined vertical integration in Medicare Part D, which provides Medicare enrollees with coverage for prescription drugs. The report focused on how vertically integrated Part D plans affected drug costs, pharmacy reimbursement, and enrollee cost sharing.
The OIG found that in 2023, 6 of the 11 vertically integrated organizations it identified accounted for about 82% of the $275.9 billion in Part D spending that year. The report also found that 79% of Part D enrollees were in a plan offered by one of the 11 vertically integrated organizations. These findings show how concentrated the Medicare prescription drug market has become among a relatively small number of vertically integrated companies.
However, the findings were not entirely straightforward. For the sample of drugs reviewed, OIG found that Medicare drug plans owned by vertically integrated companies had similar overall net drug costs compared with other Medicare drug plans. But the path to those costs looked different: vertically integrated plans generally paid pharmacies more upfront, then recouped more money later through rebates, fees, and other payment adjustments.
For patients, one of the most important findings was that enrollees in plans offered by vertically integrated Part D plans generally paid lower monthly premiums but substantially higher out-of-pocket costs for the selected drugs reviewed.
That distinction matters. A lower premium can sound like savings, but patients who rely on expensive medications may still face higher costs when they actually fill their prescriptions.
The OIG also noted that data limitations prevented it from fully determining how vertical integration affects pharmacies, especially because available data did not allow the agency to trace certain post-point-of-sale payment adjustments back to specific pharmacies. In other words, even federal investigators still do not have a complete picture of how money flows through this system.
Why Lawmakers Are Focused on This Now
Concern about vertical integration is increasingly bipartisan. Democrats and Republicans may describe the problem differently, but many lawmakers are expressing similar concerns: healthcare costs are too high, patients are struggling, independent pharmacies and provider practices are under pressure, and large healthcare conglomerates have too much influence over access and pricing.
One proposal that directly addresses these concerns is the Patients Before Monopolies Act, which was reintroduced on May 13 by Senators Elizabeth Warren and Josh Hawley, along with Representatives Diana Harshbarger and Jake Auchincloss. The bill would prohibit a parent company of a PBM or insurer from owning a pharmacy business and would require companies in violation to divest their pharmacy businesses within one year of enactment.
Supporters of the bill argue that joint ownership of PBMs, insurers, and pharmacies creates a conflict of interest because the same corporate parent may influence which medications are covered, which pharmacies patients are steered toward, and how pharmacies and providers are reimbursed. The bill’s sponsors point to the fact that the three largest PBMs — CVS Caremark, Express Scripts, and Optum Rx — are each owned by parent companies that also own major health insurers and large retail, mail-order, or specialty pharmacy businesses.
This proposal is narrower than the Break Up Big Medicine Act, which would apply the same general idea of structural separation to additional parts of the healthcare system. However, the Patients Before Monopolies Act more directly addresses a concern many patients encounter in practice: when the same company has influence over the insurance plan, the PBM, and the pharmacy, it may also influence which medications are covered, where patients are sent to fill them, and what patients ultimately pay.
For patients, this matters because many access barriers do not happen in isolation. Prior authorization requirements, pharmacy steering, network limitations, copay accumulator issues, and reliance on copay assistance can all be shaped by decisions made within the drug coverage and delivery system. When one corporate entity has influence across multiple parts of that system, it can be difficult for patients to know whether decisions are being made based on their needs or the company’s financial incentives.
The Patients Before Monopolies Act is not the only proposal in this space, but its reintroduction with bipartisan support shows that lawmakers are increasingly focused on healthcare consolidation and the role it may play in patient access and affordability.
The Infusion Access Foundation’s View
The Infusion Access Foundation supports efforts to increase transparency and address harmful incentives that restrict patient choice, increase costs, disrupt continuity of care, or limit access to clinically appropriate treatment.
For patients who depend on infusion therapies, specialty medications, and coordinated care, these issues are not abstract. Coverage rules, pharmacy requirements, and reimbursement decisions can affect whether patients receive timely treatment and whether providers, infusion practices, and pharmacies can continue supporting complex care needs.
The Infusion Access Foundation is also actively engaging advocates around these issues, including through our advocacy campaign supporting the Break Up Big Medicine Act and our advocacy campaign supporting the Patients Before Monopolies Act.
At the same time, it is important to be clear-eyed about the legislative path ahead. Bipartisan concern is real, but Congress remains difficult to move. Standalone healthcare bills can be hard to pass, even when there is agreement on the problem. These proposals may have a stronger chance if they are attached to a larger legislative package that congressional leadership has a reason to advance.
The Bottom Line
When it comes to vertical integration in healthcare, the patient concern is simple: when one company controls multiple parts of the healthcare system, it may create incentives that affect cost, access, and choice.
Recent federal findings and bipartisan legislation suggest that lawmakers are increasingly focused on those risks. While the future of these bills is uncertain, the attention itself is meaningful.
For patients, the key takeaway is that the structure of the healthcare system matters. Who owns the insurer, the PBM, and the pharmacy can influence how medications are covered, where patients are steered, and what they ultimately pay.
As policymakers continue examining vertical integration, IAF will continue monitoring these developments and supporting reforms that improve transparency, protect patient access, and help ensure that healthcare decisions are driven by patient needs rather than corporate incentives.