A new report from the House Committee on Oversight and Accountability highlights concerns surrounding pharmacy-benefit managers (PBMs), stating that they are directing patients toward more expensive medications while restricting their pharmacy options. This report follows a 32-month investigation and comes ahead of a hearing involving executives from major PBM companies.
PBMs act as intermediaries between health insurers and pharmaceutical companies, negotiating drug prices and determining patient out-of-pocket costs. The three largest PBMs in the U.S. – Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark – collectively manage about 80% of prescriptions in the country.
According to the report, PBMs have developed preferred drug lists that prioritize higher-priced brand-name medications over more affordable alternatives. An example mentioned involves emails from Cigna staff discouraging the use of cheaper alternatives to Humira, a treatment for arthritis, which was priced at $90,000 annually. Some biosimilars were available for half that cost.
The committee also reported that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies compared to using its affiliated mail-order pharmacy, thereby limiting patient choice.
A recent report by the U.S. Federal Trade Commission (FTC) echoed these findings, indicating that increased vertical integration among PBMs has led to them managing nearly 95% of U.S. prescriptions. The FTC expressed concern that dominant PBMs wield substantial power over patients’ accessibility and affordability of medication, leading to potential conflicts of interest that may disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan noted that these middlemen are reportedly “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.