Research Finds Average State-Level Pharmacy Benefit Manager Market Concentration More Than Doubled Over the Last Decade

Two factors that shape how patients access medicines — formulary tiering and community pharmacy closures — also rose over the same period.

WASHINGTON, DC, UNITED STATES, November 12, 2026 /EINPresswire.com/ -- Pharmacy benefit managers (PBMs) play a central role in patient access to medicines by managing formularies, pharmacy networks, and patient cost-sharing. Understanding the level of concentration is important to understanding the landscape in which patients access medicines.

New research from the National Pharmaceutical Council (NPC) in the American Journal of Managed Care finds average state-level PBM market concentration more than doubled over the last decade. Formulary tiering and community pharmacy closures also rose over the same period.

Formularies with more than three tiers typically raise cost-sharing for patients on specialty drugs, and pharmacy closures reduce the number of places where patients can fill prescriptions. These concurrent trends raise key questions about the relationship between PBM market concentration and patient access.

“Trends in Pharmacy Benefit Manager Market Dynamics, 2016-2025,” finds:

• Market Concentration: The average state-level concentration index rose from 1,235 in 2016 to 3,002 in 2025. Federal merger guidelines consider a market with an index of more than 1,800 to be highly concentrated.

• Tiering Requirements: The share of enrollees in formularies with more than three tiers grew from 29.8% in 2016 to 40.3% in 2025. Formularies with more than three tiers can signal a specialty tier and higher patient cost-sharing.

• Pharmacy Closures: The share of people residing in counties with net pharmacy closures grew from 27.6% in 2016 to 60.5% in 2025.

• Higher Concentration, Worse Access: In 2025, areas with higher PBM market concentration had a higher share of enrollees in formularies with more than three tiers and a higher share of people residing in counties with net pharmacy closures.

“PBM decisions have a direct impact on the patient experience, from what a prescription costs to where they can fill it,” said Jon Campbell, PhD, NPC Chief Science Officer. “Over the past decade, the PBM marketplace has changed significantly. Policymakers can use this evidence as they consider PBM reform and address potential unintended consequences of market concentration.”

The authors measured state-level PBM market concentration using the Herfindahl-Hirschman Index (HHI), drawing data from Clarivate’s Fingertip Formulary tool, PitchBook, and the Bureau of Labor Statistics. The sample included 267 million enrollees in 2025.

The data did not cover utilization management, product tier changes, prescription use, or contractual arrangements. Targeted, well-controlled studies could test whether concentration drives the changes in formulary tiering or pharmacy closures.

About the National Pharmaceutical Council
NPC serves patients and society with policy-relevant research on the value of patient access to innovative medicines and the importance of scientific advancement. We envision a world where advances in medicine are accessible to patients, valued by society, and sustainably reimbursed by payers to ensure continued innovation. For more information, visit www.npcnow.org and follow NPC on LinkedIn.

Rebekah Pepper
National Pharmaceutical Council (NPC)
+1 202-827-2078
media@npcnow.org
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