The Insurer Middleman Playbook: 3 Moves to Watch

Insurer owned PBMs are no longer just middlemen; they are the architects of many of the drug pricing and access abuses patients and providers are fighting every day. Nearly 80% of all prescription claims run through three PBMs owned by CVS Health/Aetna, Cigna’s Evernorth and UnitedHealth Group, giving these conglomerates the power to design the benefit, control the pharmacy network and capture the spread between what is paid in and what is paid out. 

Behind familiar complaints about denials, high out-of-pocket costs and independent pharmacy closures sits an insurer playbook that uses layers of middlemen, GPOs, vertical integration and red tape to move money up the corporate chain while patients, employers and community providers are left footing the bill. Take an inside look at how insurer-owned middlemen exploit loopholes in the system: 

Move 1: Hide the money in PBM‑run GPOs 

Source: https://hntrbrk.com/pbmgpo/

PBM‑run “group purchasing organizations,” or GPOs, like Ascent Health Services (for Express Scripts/Cigna), Zinc Health Services (for CVS Caremark/CVS Health) and Emisar Pharma Services (for Optum Rx/UnitedHealth Group) sit in between drug companies and the PBM.

These GPOs negotiate additional rebates and fees, but those dollars are not always covered by the contract language that requires the PBM to pass savings through to plans. That’s how these corporate entities can ultimately claim “100% of PBM rebates” are passed through, while large sums sit upstream at the affiliated GPO – out of view of employers, independent insurers and regulators. As one expert has put it, they are “covers for the Big Three to say in a contract that they pass through 100% of the rebates they get.” 

Move 2: Vertical integration as a power grab 

Vertical integration, where the insurer, PBM, pharmacy and often a GPO all sit under one roof, lets these parent entities tightly control formularies, networks and internal transfer prices.  

A USC Schaeffer analysis found that independent insurers faced premiums 36% higher than integrated carriers, highlighting how consolidation changes the terms of trade. Other research shows these vertically integrated insurers can pay their own pharmacies differently, set proprietary acquisition benchmarks and route most PBM revenues to affiliated businesses inside the same corporate family. 

This kind of closed loop makes it extremely hard for outsiders to see where value is created and where it is ultimately captured. 

Move 3: Weaponize red tape and hide the pattern 

A  national survey of independent community oncology practices found nearly unanimous reports that prior authorization, step therapy, and other insurer and PBM rules delay cancer treatment and interfere with physician‑directed care, forcing practices to hire staff just to fight denials and paperwork instead of focusing on patients. 

In vertically integrated systems, those same tools quietly steer patients to company-owned specialty and mail-order pharmacies or to drugs that fit the conglomerate’s financial strategy. As a result, what looks like neutral “utilization management” on paper can feel like gatekeeping and self-dealing in practice. 

These moves show how a handful of vertically integrated insurer-PBM giants can shape prices, coverage and access from behind the scenes – while calling it “negotiating savings” or “managing utilization.” These abuses and exploitations reiterate why emerging reforms must look beyond standalone PBMs and squarely at the integrated insurer-PBM-GPO-pharmacy stack so patients, independent providers and plan sponsors can see where the money actually goes and demand real accountability. 

Learn more about policy solutions here.