GAO Released Report on Medicare Part D Plan Integration
A new federal report highlights the market dominance of vertically integrated pharmacies in Medicare Part D plans.
Updated on Oct. 5, 2026 in Healthcare
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The Government Accountability Office released a report examining vertical integration between Medicare Part D plan sponsors and pharmacies. The data reveals that four major plan sponsors maintain significant control over drug utilization and payments within the program.
Why it matters
Vertical integration creates financial incentives for Medicare beneficiaries to use plan-owned pharmacies by offering lower cost sharing. These structures significantly influence how the majority of Part D enrollees access their prescription medications.
Four large plan sponsors, which accounted for over 40 percent of total Part D enrollment in 2023, utilized owned pharmacies to process 28 percent of total payments. Average payments for a 30-day supply of most top-utilized generic drugs were $10 or less.
The players
Government Accountability Office
This independent, nonpartisan federal agency serves as the congressional watchdog by investigating how the federal government spends taxpayer dollars.
The details
Vertically integrated sponsors prioritize mail-order pharmacy services, whereas non-owned plans rely heavily on traditional retail pharmacy networks. Consequently, payments and cost sharing for at least 94 percent of the 100 most common prescription drugs were lower when beneficiaries used these owned, plan-specific pharmacies.
Timeline
The GAO conducted its analysis of Part D utilization and payment data throughout 2023.
Medicare Part D spending reached $150 billion for 54 million beneficiaries in 2025.
The GAO officially published the findings of its investigation on October 5, 2026.
Market Landscape
This concentration of pharmacy ownership reflects a broader consolidation trend as large plan sponsors seek to control the full medication supply chain. This shift challenges the role of independent retail pharmacies by centralizing drug fulfillment within integrated corporate networks.
Medicare beneficiaries may face financial pressure to switch to mail-order services to access lower cost sharing for their prescriptions. Patients should compare their specific plan's pharmacy network requirements to determine if their current medication costs could be reduced.
The takeaway
Patients should regularly review their Medicare Part D plan details to see if using plan-affiliated pharmacies offers actual cost advantages. Understanding the structure of your provider's network can lead to significant savings on common generic medications.
Further reading
Learn more about federal oversight of the industry in the Healthcare section.
Source note: This article includes information reported by Firstwordpharma.
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