A report released by the Office of Inspector General (OIG) of the Department of Health and Human Services shed light on the effects of vertical integration of organizations on payments from Medicare Part D, stating that pharmacies owned by those vertically integrated entities received 48 percent of Part D payments in 2023. Four out of five Part D enrollees’ prescription drug benefits were managed by those vertically integrated organizations, with 85 percent of DIR fees going to vertically integrated sponsors. The report showed that eighty-two percent of the $275.9 billion spent on Part D went to just six of those vertically integrated sponsors.
You can see the full report here, and some highlights from the report here.
The OIG is also working on an audit, expected to be completed in fiscal year 2026, that will examine the contract arrangements between several vertically integrated entities and pharmacies in 2023 and 2024 and the potential effects they have on prices for drugs offered under Part D.
