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How Pharma Can Navigate Ups And Downs Of Vertical Integration In US

New Survey Of Leading US Experts Illuminates Potential Entry Point For Pharma With Integrated Entities Across The Value Chain

 
• By Michalina Jenkins, Ross D. Williams, and Caroline C. Conti

Together, we will improve patient health and experiences while lowering costs across the continuum of care.” This quote, from Andrew Witty, CEO of US health services management company Optum, after the company sealed its acquisition of DaVita Medical Group in 2019, encapsulates the oft-declared goals of vertical integration: efficiencies, improved quality of care, reduced costs. But is this the reality?

rising blocks
• Source: Shutterstock

Vertical integration – broadly defined as the combination of entities at different levels of the health care supply chain, such as when hospitals acquire physician practices or health plans acquire pharmacy benefit managers – is certainly on the rise.

Around half of all primary care physicians in the US are now affiliated with vertically integrated health systems, up from 38% in 2016. And that number is likely to keep...

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