A new report from the House Committee on Oversight and Accountability claims that pharmacy benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy options. This report follows a 32-month investigation and is timed with an upcoming hearing featuring executives from the country’s largest PBMs.
PBMs serve as third-party administrators for health insurers’ prescription drug plans, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket costs. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—manage around 80% of all prescriptions in the country.
According to the report, PBMs have established preferred drug lists that favor higher-priced brand-name drugs over more affordable alternatives. An example highlighted is Cigna, which reportedly discouraged using lower-cost alternatives to Humira, a medication for arthritis and autoimmune diseases that costs about $90,000 annually, despite the availability of a biosimilar for half the price.
Furthermore, Express Scripts allegedly informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its mail-order service. This practice is said to restrict patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report expressing concerns about the growing concentration among PBMs, stating that the six largest firms control nearly 95% of U.S. prescriptions. The FTC’s findings raise alarms as they suggest significant power held by PBMs over patients’ access to affordable medications. The report also points to potential conflicts of interest where vertically integrated PBMs might prioritize their own affiliated businesses.
FTC Chair Lina M. Khan noted that these middlemen appear to be “overcharging patients for cancer drugs,” which may result in over $1 billion in additional revenue for them.