A recent report from the House Committee on Oversight and Accountability claims that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their options for obtaining these drugs.
The report, which was reviewed by the Wall Street Journal, stemmed from a 32-month investigation by the committee in preparation for a hearing about PBMs, during which executives from the largest PBM firms are expected to testify.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies to decide how much a health plan will reimburse for specific medications. They also determine out-of-pocket costs for patients.
The three largest PBMs in the United States—Express Scripts, OptumRx (a subsidiary of UnitedHealth Group), and Caremark (part of CVS Health)—account for about 80% of the nation’s prescriptions.
According to the committee’s findings, PBMs have established preferred drug lists that favor higher-priced branded medications over more affordable alternatives. An example highlighted in the report includes internal communications from Cigna that advised against using lower-cost substitutes for Humira, a medication for arthritis and other autoimmune conditions that was priced at $90,000 annually, despite the availability of biosimilars costing half as much.
Moreover, the committee reported that Express Scripts informed patients they would incur higher expenses if they filled prescriptions at local pharmacies compared to obtaining a three-month supply through its mail-order pharmacy, thus limiting patient pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that the consolidation among PBMs has allowed the six largest players to manage about 95% of all prescriptions filled across the country.
The FTC expressed concern over these findings, noting that leading PBMs wield considerable power over Americans’ access to and affordability of prescription medications. This situation fosters potential conflicts of interest as vertically integrated PBMs may prioritize their affiliated businesses, consequently disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan remarked that the evidence suggests these intermediaries are “overcharging patients for cancer drugs,” resulting in excess revenue exceeding $1 billion.