Rising Prescription Middleman Monopoly Threatens Local Pharmacies and Patient Drug Access

2026-11-13 economy

Washington, Thursday, 12 November 2026.
A nationwide study reveals pharmacy benefit manager concentration doubled over a decade, leaving over 60% of Americans living in areas suffering from community pharmacy closures.

Decade of Consolidation: PBM Market Power Doubles

A landmark study published on November 12, 2026, by the National Pharmaceutical Council (NPC) using data from Clarivate’s Fingertip Formulary tool and PitchBook reveals that average state-level pharmacy benefit manager (PBM) market concentration more than doubled from a Herfindahl-Hirschman Index (HHI) of 1,235 in 2016 to 3,002 in 2025 [1]. This concentration now exceeds the federal threshold for high market concentration (HHI > 1,800), signaling a dramatic shift in the pharmaceutical middleman landscape. The Federal Trade Commission (FTC) had previously warned in July 2024 that the three largest PBMs controlled nearly 80% of U.S. prescriptions in 2023, with affiliated pharmacies accounting for nearly 70% of specialty drug revenue [3].

Patient Impact: Tiered Formularies and Pharmacy Desertification

The same study found that the share of Americans enrolled in formularies with more than three drug tiers grew from 29.8% in 2016 to 40.3% in 2025, effectively shifting more prescription costs to patients [1]. Concurrently, the percentage of Americans living in counties with net pharmacy closures surged from 27.6% to 60.5% over the same period [1]. States with higher PBM concentration (HHI > 1,800) showed significantly worse patient access metrics, with 37.9% of enrollees in multi-tier formularies compared to 23.1% in unconcentrated markets (HHI < 1,000) and 46.3% of the population exposed to pharmacy closures versus 18.2% in less concentrated states [2]. Dr. Jon Campbell, NPC Chief Science Officer, emphasized that ‘PBM decisions have a direct impact on the patient experience, from what a prescription costs to where they can fill it’ [1].

Corporate Strategy Shifts: CVS Health’s Breakup Announcement

In a strategic pivot announced on November 4, 2026, CVS Health revealed plans to split into two publicly traded companies by the first half of 2028, separating its retail pharmacy operations (9,000 stores) from its insurance and PBM businesses (Aetna and Caremark) [3]. This move reverses the 2018 Aetna acquisition and follows industry warnings from observers like Marcus Whitney, who noted that ‘the upside of the payvider business model has hit a wall’ due to employer lawsuits and regulatory scrutiny [5]. The breakup comes as CVS reported $108.4 billion in Q3 2026 revenue (5.4% year-over-year growth) despite declining margins in its pharmacy segment, which saw GAAP operating margins drop from 4.6% to 3.5% between 2023 and 2025 [3].

Regulatory Crackdowns and Market Reckoning

State regulators are taking direct action against PBM practices. On November 8, 2026, Florida Insurance Commissioner Mike Yaworsky levied over $12.66 million in penalties against PBMs for contract violations, citing failures to pay examiner invoices and lack of transparency [6]. Yaworsky stated, ‘We must demand transparency and accountability for all Pharmacy Benefit Managers in Florida to ensure companies cannot hide revenue or raise costs for patients’ [6]. The Florida Office of Insurance Regulation began examining PBMs biennially after Governor Ron DeSantis signed the Prescription Drug Reform Act in May 2023 [6]. Meanwhile, federal scrutiny continues with the FTC’s 2024 report on PBMs’ role in ‘inflating drug costs and squeezing Main Street pharmacies’ [3].

Market Dynamics: What’s Next for Patients and Pharmacies?

The NPC study’s findings suggest that PBM market power has reached critical levels where patient access and pharmacy viability are directly threatened. With 60.5% of Americans now living in counties affected by pharmacy closures [1], the healthcare system faces a potential crisis in medication access, particularly for elderly and chronic disease patients. The CVS breakup may signal broader industry trends, with experts like Thani Jambulingam noting that the restructuring’s success depends on three evaluative tests: improved competition, enhanced supply-chain efficiency, and better patient access and affordability [alert! ‘Current data cannot predict long-term outcomes of structural changes’] [3]. Policy observers warn that without significant intervention, the concentration trend will continue to erode local pharmacy networks and increase patient out-of-pocket costs [2].

Sources

Pharmacy benefit managers Healthcare consolidation