“Are Pharmacy Benefit Managers Driving Up Drug Prices?”

Pharmacy-benefit managers (PBMs) have been accused of directing patients towards more costly medications and restricting their pharmacy options, as revealed in a recent report by the House Committee on Oversight and Accountability.

The report, which was reviewed by the Wall Street Journal, emerged from a 32-month investigation and precedes a hearing that will feature executives from some of the leading PBM companies in the nation.

PBMs act as intermediaries that administer prescription drug plans for health insurers, negotiating prices with pharmaceutical firms regarding the costs of medications covered by health plans. They also determine the out-of-pocket expenses for patients.

The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle around 80% of prescriptions written in the country.

According to the committee’s findings, these PBMs compile preferred drug lists that often favor higher-priced brand-name medications over less expensive alternatives. For instance, emails from staff at Cigna highlighted a discouragement of using lower-cost alternatives to Humira, which is prescribed for arthritis and other autoimmune disorders, costing approximately $90,000 annually at that time, despite the availability of a biosimilar for half the price.

Additionally, Express Scripts reportedly informed patients that filling a prescription at their local pharmacy would be more expensive than obtaining a three-month supply through its affiliated mail-order service. This practice was noted as a limitation on patients’ pharmacy choices.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that increasing consolidation in the industry has allowed the six largest PBMs to control nearly 95% of all prescriptions in the United States.

The implications of these findings are serious. The FTC warned that the major PBMs wield substantial influence over patients’ access to and affordability of prescription medications. The situation has facilitated a framework where vertically integrated PBMs seem to favor their own affiliated companies, leading to potential conflicts of interest that disadvantage independent pharmacies and inflate drug prices.

FTC Chair Lina M. Khan emphasized that the evidence points to middlemen significantly overcharging patients for cancer drugs, resulting in over $1 billion in additional profits.

Popular Categories


Search the website