“Are Pharmacy-Benefit Managers Driving Up Drug Prices Secretly?”

A new report from the House Committee on Oversight and Accountability indicates that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their options for obtaining them.

The report, which was seen by the Wall Street Journal, is the result of a 32-month investigation by the committee and precedes a hearing involving executives from the largest PBMs in the country.

PBMs act as intermediaries for prescription drug plans associated with health insurers. They negotiate prices with pharmaceutical companies and also determine the out-of-pocket expenses that patients face.

Currently, the three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage around 80% of U.S. prescriptions.

The committee’s findings revealed that PBMs create preferred drug lists that often feature higher-priced brand-name medications instead of more affordable alternatives. For instance, the report mentions internal emails from Cigna that discouraged patients from using less expensive alternatives to Humira, a costly drug used to treat arthritis and other autoimmune disorders, which was priced at $90,000 annually. At the time, a biosimilar was available for about half that cost.

Moreover, the report found that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies compared to obtaining three-month supplies from its affiliated mail-order pharmacy. This practice restricts patients’ choices in selecting their pharmacies.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report highlighting that the top six PBMs control nearly 95% of all prescription fills in the U.S., attributing this concentration to increased vertical integration. The FTC’s findings raised concerns, stating that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” The situation fosters a framework in which these PBMs may favor their own affiliated businesses, leading to potential conflicts of interest that could harm unaffiliated pharmacies and drive up prescription costs.

FTC Chair Lina M. Khan criticized the middlemen, claiming that they are “overcharging patients for cancer drugs,” generating over $1 billion in extra revenue as a result.

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