Pharmacy benefit managers (PBMs) are directing patients toward pricier medications and restricting their choices regarding where to obtain them, according to a recent report from the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, stems from a 32-month investigation and precedes a hearing on PBMs that will feature executives from the nation’s largest management companies.
PBMs serve as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket expenses.
The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—oversee about 80% of U.S. prescriptions.
The committee’s findings indicate that PBMs have developed lists featuring preferred medications that prioritize expensive brand-name drugs over more affordable alternatives. For instance, the report highlights internal communications from Cigna that discouraged the use of less costly alternatives to Humira, a medication for arthritis and other autoimmune diseases, which was priced at $90,000 annually. A biosimilar treatment was available at half the cost.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies rather than obtaining a three-month supply through its affiliated mail-order service. Such practices limit patients’ options when choosing pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report stating that the increasing concentration and vertical integration among PBMs has allowed the six largest firms to manage nearly 95% of all prescriptions in the U.S.
The implications of these findings are concerning. The FTC pointed out that leading PBMs wield substantial influence over Americans’ access to affordable prescription medications. This system creates conflicts of interest where vertically integrated PBMs may favor their own affiliated businesses, putting unaffiliated pharmacies at a disadvantage and raising drug costs for patients.
FTC Chair Lina M. Khan noted that the data indicates these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.