A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications and restricting their options for obtaining those medications. This report follows a 32-month investigation prior to an upcoming hearing involving leaders from the country’s major PBMs.
PBMs act as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with drug manufacturers on behalf of health plans and determining out-of-pocket costs for consumers. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage about 80% of all prescriptions in the country.
The committee’s investigation found that PBMs have compiled lists of preferred medications that highlight higher-priced brand-name drugs over more affordable alternatives. For instance, the report mentions communications from Cigna staff urging against the use of cheaper alternatives to Humira, a medication for arthritis and other autoimmune diseases that cost around $90,000 annually, despite the availability of biosimilars priced at half that amount.
Moreover, Express Scripts informed patients that using a local pharmacy would result in higher out-of-pocket costs compared to using its mail-order service, effectively limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report noting that increased vertical integration has allowed the six largest PBMs to dominate nearly 95% of all prescription fills in the nation.
The FTC’s findings raise alarms regarding the growing power of leading PBMs, which significantly affects Americans’ access to affordable medications. The report describes a system where vertically integrated PBMs may favor their own subsidiaries, resulting in conflicts of interest, harming independent pharmacies, and raising prescription drug prices.
FTC Chair Lina M. Khan emphasized that these middlemen are imposing higher costs on patients for cancer medications, generating over $1 billion in additional revenue.