A recent report from the House Committee on Oversight and Accountability highlights concerns about pharmacy-benefit managers (PBMs) directing patients towards higher-cost medications and restricting their pharmacy options. This report, detailed in the Wall Street Journal, follows a comprehensive 32-month investigation by the committee ahead of a hearing featuring executives from major PBMs.
PBMs, which serve as intermediaries for health insurers’ prescription drug plans, negotiate drug prices with pharmaceutical companies and determine patient out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle about 80% of all prescriptions.
The committee’s findings indicate that PBMs have prioritized lists of preferred medications that include more expensive brand-name drugs instead of cheaper alternatives. The report specifically mentions communication from Cigna staff recommending against less costly substitutes for Humira, a medication for arthritis and autoimmune conditions priced at approximately $90,000 annually, while a similar biosimilar was available for about half that amount.
Additionally, the committee noted that Express Scripts informed patients they would face higher costs for prescriptions filled at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thus limiting patient choice.
A report from the U.S. Federal Trade Commission (FTC) released earlier this month underscores similar issues, stating that extreme consolidation among the largest PBMs allows them to control nearly 95% of U.S. prescription fills. The FTC expressed alarm over the significant power PBMs wield over patient access and affordability of medications, suggesting that their vertically integrated structures lead to conflicts of interest, potentially harming independent pharmacies and raising drug costs.
FTC Chair Lina M. Khan emphasized that the findings reveal how these intermediaries are inflating costs for patients, particularly for cancer medications, resulting in over $1 billion in additional revenue for them.