A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their choice of pharmacies. This report, shared with the Wall Street Journal, follows a 32-month investigation prior to a hearing involving top executives from major PBMs.
PBMs function as intermediaries for prescription drug plans on behalf of health insurers. They negotiate prices with drug manufacturers and determine the out-of-pocket expenses for patients. The three largest PBMs in the U.S. — Express Scripts, OptumRx (owned by UnitedHealth Group), and Caremark (part of CVS Health) — collectively manage around 80% of prescriptions.
According to the committee’s findings, PBMs often favor pricier brand-name drugs over less expensive alternatives. For instance, the report highlights internal communications from Cigna discouraging the use of more affordable options for Humira, a popular treatment for arthritis, which was priced at $90,000 annually at the time, while a biosimilar was available for around half that cost.
Moreover, Express Scripts reportedly misinformed patients, indicating that a three-month supply through their affiliated mail-order pharmacy would be more cost-effective than filling prescriptions at local pharmacies, thereby limiting patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report stating that the six largest PBMs now control nearly 95% of U.S. prescriptions, raising concerns about their immense power over drug accessibility and affordability.
The FTC’s findings highlight a troubling reality, stating, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” The report indicates that this concentration creates a system where PBMs are incentivized to favor their own businesses, resulting in conflicts of interest that could negatively impact independent pharmacies and ultimately drive up drug costs.
FTC Chair Lina M. Khan emphasized that the evidence suggests these intermediaries are significantly inflating costs for patients accessing cancer drugs, leading to excess revenues exceeding $1 billion.