Over the past two years, giant pharmacy benefit managers have discovered a powerful, but potentially controversial, new way to make money. The PBMs have taken control of specialty pharmacies that supply some of the most expensive drugs in the world. As a result, some experts say, the long-embattled PBM industry could face a whole new set of conflicts going forward. PBMs promise to save their clients money by managing their drug benefits for them. However, critics say, the PBMs could start pushing their clients to cover new biotech drugs simply because the high-margin transactions will fatten their own bottom lines. Expensive specialty drugs, used to treat chronic illnesses such as hemophilia and renal failure, often work like miracles but sometimes offer questionable benefits at best. "The PBMs recommend to their clients which drugs should be covered," says Lawrence Abrams, a California economist who does some consulting work linked to the PBM industry. "And they could gain by encouraging more usage of biotech drugs than would be warranted based upon a cost-benefit analysis." Following a recent flurry of acquisitions, all of the Big Three PBMs now operate major specialty pharmacies. PBM giant Medco ( MHS), which snatched up Accredo earlier this year, now portrays itself as the biggest specialty pharmacy. Caremark ( CMX) has ranked as a major player all along. And Express Scripts ( ESRX) recently inked a $1.3 billion deal to buy one of the biggest independent specialty pharmacies left. Together, they have rushed to dominate an industry defined by its explosive growth. This year, Medco by itself expects to capture $4.5 billion -- or 8.3% -- of the booming specialty market. Going forward, the company then hopes to keep increasing its share of a business that is expected to grow by at least 20% a year. That's more than double the growth rate of the core pharmaceutical market. Medco points to increased utilization of specialty drugs -- costing between $3,000 and $400,000 a year -- as a major driver. "Specialty pharmacy is the fastest growing sector within healthcare today, and its drug spend is the fastest growing share of the total U.S. drug spend," says Medco spokeswoman Ann Smith. "As it is Medco's job to help manage both the cost and care of the pharmacy benefit for our clients and their members, it is a space where Medco wants to be No. 1, and -- with the acquisition of Accredo -- we are there." But Abrams sees problems with such arrangements. Specifically, he questions whether PBMs will still recommend the use of so-called step therapy -- which calls for trying cheaper treatments first -- when they can make so much more money by supplying expensive specialty drugs instead. "When the PBMs didn't own the specialty pharmacies, they were neutral on the matter," Abrams explains. "But now it's in their best interests for their clients to cover the most expensive drugs available. Can we trust PBMs to be objective on this?" For their part, PBMs have pledged to better serve their customers by managing their traditional and specialty drug coverage alike. And even outside experts see some appeal to that one-stop arrangement. Still, PBMs have been accused of shortchanging their customers by saving them less money than they should in the past. In response, they have promised fresh transparency -- which could threaten their traditional margins -- even as they shift more and more attention toward their specialty operations. In the meantime, the Big Three each took a hit on Friday due to concerns about slowing growth. Medco fell 1.2% to $53.31. Caremark slipped 1.8% to $50.58. And Express Scripts dropped 2.6% to $80.67. Nevertheless, all three continue to hover within close reach of their all-time highs.