By Richard G. Frank, Conrad Milhaupt
Introduction and background
The health care sector has become increasingly vertically integrated in recent years. The initial waves of integration largely involved mergers and acquisitions between hospitals and physician practices. More recently, the parent companies of large health insurers have been acquiring pharmacy benefit managers (PBMs), specialty pharmacies, physician practices, and other related health care businesses.
In 2015, the three largest PBMs in the country (Express Scripts, CVS Caremark, and OptumRx) managed the drug benefits of 78% of the population. Following the Cigna acquisition of Express Scripts and the CVS/Aetna merger in late 2018, each of these PBMs is now part of a large health insurance parent company. (OptumRx is a UnitedHealthcare subsidiary.) Humana also owns and operates a large national PBM known as Humana Pharmacy Solutions.
In the provider market, UnitedHealthcare was estimated to employ about 50,000 physicians in the U.S. at the start of 2021 through its subsidiary OptumHealth. Cigna, CVS/Aetna, and Elevance Health (formerly Anthem), among others, are following suit. Specific examples include Cigna purchasing MDLive, Elevance Health purchasing…
