Medicare Part D: Payments and Contracts Between Pharmacies and Plan Sponsors That Are Vertically Integrated

GAO examined four large Medicare Part D plan sponsors that are vertically integrated, meaning they own the pharmacy benefit managers and pharmacies that fill their members' prescriptions. Those owned pharmacies, mostly mail-order, handled about 24% of drug utilization and 28% of total payments in 2023. For at least 94% of the 100 most common drugs, payments and patient cost sharing were lower at owned pharmacies, a pattern that nudges beneficiaries toward using them.

The trend reversed for some high-cost brand-name drugs: for about half of the 20 drugs with the highest per-prescription payments, cost sharing at owned pharmacies ran up to $340 higher than at outside pharmacies. Part D covered $150 billion in drugs for 54 million beneficiaries in 2025. GAO's findings apply only to the four sponsors studied and only to 2023 data.

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