Markup Madness 2025: Hospitals, Insurers, and the Broken Buy-and-Bill Market for Biosimilars

After multiple years of mandated disclosure of negotiated hospital-insurer rates, those of us who follow the buy-and-bill channel might have expected transparency to reduce drug price variability, lower hospital markups, and accelerate adoption of lower-cost biosimilars.

Alas, that’s not what the latest data reveal.

DCI’s analysis of four national commercial insurers—Aetna, Anthem, Cigna, and UnitedHealthcare—and 26 hospitals found that:

• Hospitals still earn significant markups over average sale price (ASP). 340B hospitals earn even more.

• Insurers pay wildly varying amounts for the same drug.

• Some hospitals get paid significantly more than others for the same drug.

• Insurers can pay more for a lower-cost biosimilar than for the higher-cost reference product.

While provider-administered biosimilars are significantly cheaper than their reference products, hospitals and insurers are still making them expensive for plan sponsors. Meanwhile, patients with coinsurance and deductibles are paying higher out-of-pocket costs.

Transparency was supposed to clean things up—but someone forgot to bring the mop.

The 340B Contract Pharmacy Market in 2025: Big Chains and PBMs Tighten Their Grip

The 340B Drug Pricing Program has emerged as a growing source of profits for pharmacies and pharmacy benefit managers (PBMs).

Drug Channels Institute’s latest exclusive analysis of the 2025 market reveals a highly concentrated market structure increasingly dominated by a handful of major players:

• About 32,000 pharmacy locations—nearly 60% of the entire U.S. pharmacy industry—function as contract pharmacies for the hospitals and federal grantees that participate in the 340B program.

• The 340B contract pharmacy has become increasingly concentrated with five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), Walgreens, and Walmart.

The 2025 market data below illustrate just how far the 340B program’s operations have diverged from its original intent. As Senator Bill Cassidy recently noted, the 340B program “was never meant to be part of an earnings call. It was meant to be part of patient care.”

For more on what the 340B program’s growth means for pharmacies, join Adam J. Fein, Ph.D., and Antonio Ciaccia on June 20 for a new live video webinar: What’s Next for Retail Pharmacy: Data, Debate, and Disruption.

Pharmacist Salaries and Employment in 2024: Retail Employment Collapse Offset by Hospital Boom

It’s time for Drug Channels’ annual look at pharmacist salaries and employment.

There was more bad news, as employment in retail pharmacies and drugstores dropped by 8,500 positions in 2024, following a drop of 4,800 positions in 2023. Employment in mass merchants and supermarkets with pharmacies increased. Meanwhile, employment at hospitals surged to a new high, growing by nearly 7,000 positions in 2024.

Average salaries hit $137,000, but varied widely across practice settings. However, salary growth did not keep pace with overall inflation.

Downsizing by the larger pharmacy chains, combined with Rite Aid’s liquidation, means that 2025 looks even grimmer for retail pharmacists. Full salary and employment data below for your enjoyment or sorrow. Click here to share your thoughts on the pharmacist job market with the Drug Channels LinkedIn community.

Jump to:

• Pharmacist Employment Trends

• Pharmacist Salary Trends

• Methodology

UPCOMING LIVE VIDEO WEBINAR!

What’s Next for Retail Pharmacy:

Data, Debate, and Disruption.

Get ready for the future of pharmacy on June 20, 2025 (12:00–1:30 p.m. ET). Dr. Adam J. Fein and Antonio Ciaccia will unpack the good, the bad, and the ugly of the pharmacy industry—and explore what it means for you. This dynamic session will blend expert insights and real-time debate. Click here to register.

Follow the 340B Dollar: Senator Cassidy Exposes How CVS Health and Walgreens Profit as 340B Contract Pharmacies

Two weeks ago, Senator Bill Cassidy—now chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP)—dropped a must-read, eyebrow-raising report on the out-of-control 340B Drug Pricing Program. (Link below.)

The report reveals previously confidential information showing how billions are funneled to health systems and pharmacies—with manufacturers unable to follow the flow.

Below, we use these new disclosures to illustrate the 340B program’s hidden prescription economics for 340B contract specialty pharmacies operated by CVS Health and Walgreens Boots Alliance.

As you can see, the program’s participants earn substantial margins, while plans and third-party payers foot the bill.

What do you think? Click here to share your thoughts with the Drug Channels LinkedIn community.  

Four Revelations from Minnesota’s First 340B Transparency Report (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: PBM Industry Update: Trends, Challenges, and What’s Ahead.

Click here to see the original post from December 2024.

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It’s time to pay attention to the money behind the 340B curtain.

Minnesota just released the industry‘s first ever mandated financial report on the 340B Drug Pricing Program. Below, I do a wicked deep dive into the data and highlight crucial implications about spending, profits, pharmacies, plans, patients, program integrity, and more.

There are important limitations to these data. But Minnesota’s report marks a valuable first step on the yellow brick road to the wonderful world of transparency. I suspect similar reports are gonna be popular.

White Bagging Update 2024: Providers’ Pushback Preserves Buy-and-Bill (rerun)

This week, I’m rerunning some popular posts while I prepare for tomorrow’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll share some thoughts on how vertical integration will affect the buy-and-bill channel.

Click here to see the original post from September 2024.

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Time for DCI’s annual update on the channels for provider-administered drugs. Below, I review the latest data on 2024 trends and compare them to the pre-pandemic figures.

For 2024, payers report that specialty pharmacies—via white and clear bagging—have displaced buy-and-bill for a meaningful share of commercial covered lives utilizing provider-administered oncology drugs. However, provider pushback has limited specialty pharmacies' share gains, so that buy-and-bill remains the most common channel for these products.

Payers’ adoption of white bagging—and provider’s push back—reflect the ongoing battle for oncology margin in U.S. drug channels. Let’s hope that patients don’t get caught in the crossfire.

P.S. Today’s article is adapted from Chapter 3 of DCI’s forthcoming 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, which will be available to preorder next week at special introductory pricing.

Follow the 340B Prescription Dollar: How PBMs Profit from 340B Contract Pharmacies (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll provide an update the 340B program, which continues to defy gravity. Click here to see the original post.

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In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market.

In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies.

If this clip whets your appetite for more, register to watch a replay of the full 90-minute video webinar from June.

You can also check out our recent data deep dive: Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis.

Click here if you can’t see the video below.

Four Revelations from Minnesota’s First 340B Transparency Report

It’s time to pay attention to the money behind the 340B curtain.

Minnesota just released the industry‘s first ever mandated financial report on the 340B Drug Pricing Program. Below, I do a wicked deep dive into the data and highlight crucial implications about spending, profits, pharmacies, plans, patients, program integrity, and more.

There are important limitations to these data. But Minnesota’s report marks a valuable first step on the yellow brick road to the wonderful world of transparency. I suspect similar reports are gonna be popular.

And don't forget to put on your ruby slippers and hear from Doctor of Thinkology Adam J. Fein. During next week’s Drug Channels Outlook 2025 live video webinar, he'll tell you what's ahead for the program that continues to defy gravity.

Transparency Shocker: Biosimilars Are Getting Cheaper—But Hospitals and Insurers Can Make Them Expensive

Here on Drug Channels, we have long highlighted the boom in provider-administered biosimilars. In contrast to the pharmacy market, adoption of these biosimilars is growing, prices are dropping, and formulary barriers continue to fall.

Novel transparency information reveals that this good news doesn’t always translate into savings. Below, we rely on a unique data set from Turquoise Health to examine how much four national commercial health plans—Aetna, Anthem, Cigna, and UnitedHealthcare—paid hospitals for Avastin and its two most significant biosimilar competitors.

As we demonstrate, health plans pay hospitals far above acquisition costs for biosimilars. What’s more, plans can pay hospitals more for a biosimilar than for the higher-cost reference product. The U.S. drug channel system is warping hospitals’ incentives to adopt biosimilars, while simultaneously raising costs for commercial plans.

The namesake of my alma mater once said: “Sunlight is said to be the best of disinfectants.” What would happen if we disinfected the entire channel?

The 340B Program Reached $66 Billion in 2023—Up 23% vs. 2022: Analyzing the Numbers and HRSA’s Curious Actions

Reality has again failed to support the spin surrounding the 340B Drug Pricing Program.

For 2023, discounted purchases under the 340B program reached a record $66.3 billion—an astounding $12.6 billion (+23.4%) higher than its 2022 counterpart. The gross-to-net difference between list prices and discounted 340B purchases also grew, to $57.8 billion (+$5.5 billion). 340B purchases are now almost 40% larger than Medicaid’s prescription drug purchases.

Hospitals again accounted for 87% of 340B purchases for 2023. Purchases at every 340B covered entity type grew, despite drug prices that grew more slowly than overall inflation.

Lobbyists claim that manufacturers’ 340B contract pharmacy changes are “stripping billions of dollars from the healthcare safety net.” But every year, the data tell a very different story. Only in the U.S. healthcare system can billions more in payments and spreads be considered a cut.

Read on for full details and our analysis, along with fresh details of troubling behavior by the Health Resources and Services Administration (HRSA).

Five Crucial Trends Facing U.S. Drug Wholesalers in 2024 and Beyond

As regular readers of Drug Channels know, U.S. distribution and dispensing channels for prescription drugs are undergoing significant evolution and consolidation as the changing economics of pharmaceuticals challenge conventional business models.

During this period of volatility, the core business model of the Big Three public pharmaceutical distribution companies—Cardinal Health, Cencora, and McKesson—remains intact. Put simply: Buy low, sell high, collect early, and pay late.

But as I explain below, wholesalers continue to position themselves as essential intermediaries by expanding their industry position and strengthening their economic fundamentals.

Read on for five key pricing, pharmacy, provider, and manufacturer trends that are driving the U.S. drug wholesaling industry.

For even more, check out DCI's new 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, the fifteenth edition of our deep dive into wholesale distribution channels.Click here to download a free report overview (including key industry trends, the table of contents, and a list of exhibits)

Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis (rerun)

This week, I’m rerunning some popular posts while we put the finishing touches on DCI’s new 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post from June 2024.

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The 340B contract pharmacy market shows little sign of slowing down. Drug Channels Institute’s exclusive analysis of the 2024 market reveals that:

• About 33,000 pharmacy locations—more than half of the entire U.S. pharmacy industry—act as contract pharmacies for the hospitals and federal grantees that participate in the 340B program. 

• Five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market.

• Over the past four years, manufacturers’ restrictions on 340B contract pharmacies have led hospitals to deepen their relationships with the largest PBMs—even as those PBMs have simultaneously limited hospitals’ direct participation in specialty pharmacy networks.

For an updated look at what’s next for the 340B contract pharmacy market, join Adam J. Fein, Ph.D., on June 21 for his latest live video webinar: The 340B Drug Pricing Program: Trends, Controversies, and Outlook.

White Bagging Update 2024: Providers’ Pushback Preserves Buy-and-Bill

Time for DCI’s annual update on the channels for provider-administered drugs. Below, I review the latest data on 2024 trends and compare them to the pre-pandemic figures.

For 2024, payers report that specialty pharmacies—via white and clear bagging—have displaced buy-and-bill for a meaningful share of commercial covered lives utilizing provider-administered oncology drugs. However, provider pushback has limited specialty pharmacies' share gains, so that buy-and-bill remains the most common channel for these products.

Payers’ adoption of white bagging—and provider’s push back—reflect the ongoing battle for oncology margin in U.S. drug channels. Let’s hope that patients don’t get caught in the crossfire.

P.S. Today’s article is adapted from Chapter 3 of DCI’s forthcoming 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, which will be available to preorder next week at special introductory pricing.

Drug Channels News Roundup, August 2024: My $0.02 on the IRA’s MFPs, UNC’s New PBM, Amazon vs. Retail, Fixing 340B, and Mark Cuban Lets Loose

Another news-laden summer is ending. Time to pack away your bathing suit, send the kids back to school, and cherish these curated curiosities that I combed from the Jersey shore:

• Some uncomfortable realities of the Inflation Reduction Act’s (IRA’s) first set of 10 prices

• Amazon goes after retail pharmacies with an amusing lack of self-awareness

• A health system-backed start-up pharmacy benefit manager (PBM) will somehow deliver massive drug costs savings

• An intriguing solution for fixing the 340B program

Plus, Mark Cuban unloads on the healthcare system during an entertaining interview.

P.S. Join my nearly 58,000 LinkedIn followers for daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.

Have you requested an invite to the inaugural Drug Channels Leadership Forum? Attendance will be highly limited, so apply now. Full agenda coming soon!

Follow the 340B Prescription Dollar: How PBMs Profit from 340B Contract Pharmacies (Video)

In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market.

In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies.

If this clip whets your appetite for more, register to watch a replay of the full 90-minute video webinar from June.

You can also check out our recent data deep dive: Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis.

Click here if you can’t see the video below.

Drug Channels News Roundup, July 2024: My $0.02 on FTC’s PBM Report, GoodRx & Humira, Averon = CVS + Cardinal, IRA vs. 340B, and My Favorite Chart

Bello! The hot and hazy days of summer are here. Go for a swim to cool off and then enjoy this refreshing selection of articles chosen by Drug Channels para tu.

• Did the FTC’s compelling interim report prove its case?

• GoodRx joins the Humira biosimilar price war with Boehringer Ingelheim

• Averon revealed to be a new buying group for biosimilars for CVS Health and Cardinal Health

• Why the IRA will be bad news for 340B hospitals

Plus, the June 2024 update to my all-time favorite chart. Muak muak muak!

P.S. Join my more than 57,000 LinkedIn followers for daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.

Have you requested an invite to the inaugural Drug Channels Leadership Forum? Attendance will be highly limited, so apply now. Full agenda coming in early September!

The Top 15 Specialty Pharmacies of 2023: Market Shares and Revenues at the Biggest PBMs, Health Plans, and Independents (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: The 340B Drug Pricing Program: Trends, Controversies, and Outlook.

One important update to the figures below: We (and many others) had significantly underestimated Walgreens' revenues and market share. As we discuss below, its market share is closer to 10%, compared with the 3% that we originally reported.

Click here to see the original post from April 2024.

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Drug Channels Institute’s (DCI’s) latest analysis finds that participants in the specialty pharmacy market continue to get more diverse—although revenues remain highly concentrated.

We have identified nearly 1,800 dispensing sites with specialty pharmacy accreditation—about 40% of which are owned by hospitals, physician practices, and other healthcare providers.

Alas, specialty pharmacies owned by the three largest pharmacy benefit managers (PBMs) have the most brass in their pocket, as they accounted for two-thirds of prescription revenues from pharmacy-dispensed specialty drugs.

Read on for DCI’s latest overview of the 2023 marketplace and revenues of the biggest market participants, along with key specialty pharmacy trends.

Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis

The 340B contract pharmacy market shows little sign of slowing down. Drug Channels Institute’s exclusive analysis of the 2024 market reveals that:

• About 33,000 pharmacy locations—more than half of the entire U.S. pharmacy industry—act as contract pharmacies for the hospitals and federal grantees that participate in the 340B program. 

• Five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market.

• Over the past four years, manufacturers’ restrictions on 340B contract pharmacies have led hospitals to deepen their relationships with the largest PBMs—even as those PBMs have simultaneously limited hospitals’ direct participation in specialty pharmacy networks.

For an updated look at what’s next for the 340B contract pharmacy market, join Adam J. Fein, Ph.D., on June 21 for his latest live video webinar: The 340B Drug Pricing Program: Trends, Controversies, and Outlook.

Pharmacist Salaries and Employment in 2023: The Grass Keeps Getting Greener in Hospitals

It’s time for the annual update to Drug Channels Institute’s (DCI) analysis of pharmacist salaries and employment.

2023 was another tough year for pharmacists working in retail settings. While average salaries grew, they did not keep pace with overall inflation. Pharmacist employment at drug stores shrank but grew at supermarkets and mass merchants.

Meanwhile, employment and salaries in non-retail settings—hospitals, physician offices, outpatient centers, and home healthcare—continued to grow. These settings now employ one in three U.S. pharmacists. Greener grass—or just different soil?

Full salary and employment data below for your enjoyment or sorrow.

What’s ahead for 340B-eligible hospitals? Find out during The 340B Drug Pricing Program: Trends, Controversies, and Outlook, a new live video webinar with Adam J. Fein, PhD. Click here to learn more and reserve your spot at the June 21 webinar.

The Top 15 Specialty Pharmacies of 2023: Market Shares and Revenues at the Biggest PBMs, Health Plans, and Independents

Drug Channels Institute’s (DCI’s) latest analysis finds that participants in the specialty pharmacy market continue to get more diverse—although revenues remain highly concentrated.

We have identified nearly 1,800 dispensing sites with specialty pharmacy accreditation—about 40% of which are owned by hospitals, physician practices, and other healthcare providers.

Alas, specialty pharmacies owned by the three largest pharmacy benefit managers (PBMs) have the most brass in their pocket, as they accounted for two-thirds of prescription revenues from pharmacy-dispensed specialty drugs.

Read on for DCI’s latest overview of the 2023 marketplace and revenues of the biggest market participants, along with key specialty pharmacy trends.