A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their pharmacy options. The report, which follows a 32-month investigation, coincides with an upcoming hearing involving top executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies and determining the out-of-pocket expenses patients face. Notably, Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark control about 80% of U.S. prescriptions.
The committee’s findings suggest that these PBMs favor higher-cost brand-name medications over cheaper alternatives. An example highlighted in the report includes internal communications from Cigna discouraging the use of cost-effective substitutes for Humira, a drug for autoimmune conditions that was priced at $90,000 annually, despite the availability of a biosimilar for half that cost.
Additionally, Express Scripts reportedly informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply via its mail-order service. This practice limits patients’ choices regarding their pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report echoing similar concerns. The FTC noted that increased vertical integration among the largest PBMs enables them to control nearly 95% of all prescriptions filled in the U.S.
The implications of these findings are significant, as the FTC stated, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation fosters a scenario where vertically integrated PBMs may prioritize their own businesses, resulting in conflicts of interest and higher drug prices for patients.
FTC Chair Lina M. Khan emphasized that these middlemen are contributing to inflated costs for cancer medications, generating over $1 billion in additional revenue.