Medicare Part D: Payments and Contracts Between Pharmacies and Plan Sponsors That Are Vertically Integrated [Reissued with revisions on Oct. 6, 2026]

What GAO Found The insurance plan sponsors that provide Medicare Part D drug coverage have increasingly become vertically integrated—that is, under common ownership—with pharmacy benefit managers and pharmacies. GAO found that, for four large Part D plan sponsors, the pharmacies they owned accounted for about 28 percent of the Part D drugs they provided to their enrollees (drug utilization) and about 24 percent of the total payments to pharmacies in 2023 (see figure). Payments included both reimbursement from plan sponsors and cost sharing paid by or on behalf of beneficiaries. When these vertically integrated plan sponsors’ own pharmacies provided drugs to their enrollees, they primarily did so through mail-order pharmacies. In contrast, other (non-owned) pharmacies primarily provided drugs through retail pharmacies. Percentage of Drug Utilization and Payments at Owned and Non-Owned Pharmacies for Four Selected Medicare Part D Plan Sponsors, 2023 When these plan sponsors paid pharmacies for a 30-day supply of the 100 most commonly used prescription drugs, payments and cost sharing for at least 94 percent of these drugs were lower for owned pharmacies than for non-owned pharmacies. These 100 drugs with the highest total utilization in 2023 were primarily generic drugs, and average payments to owned and non-owned pharmacies for a 30-day supply of most were $10 or less. Lower cost sharing at plan sponsors’ own (primarily mail-order) pharmacies gives beneficiaries a financial in