Pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting where they can obtain them, as revealed by a new report from the House Committee on Oversight and Accountability.
The report, examined by the Wall Street Journal, came after a 32-month investigation by the committee ahead of a hearing featuring executives from the largest PBMs in the country.
PBMs act as third-party administrators of prescription drug plans for health insurers, negotiating with pharmaceutical companies on drug prices for health plans. They also determine the out-of-pocket costs for patients.
Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, the three largest PBMs in the U.S., manage about 80% of the country’s prescriptions.
The committee’s report concluded that PBMs have developed preferred drug lists that favor higher-priced brand-name drugs over cheaper options. For instance, emails from Cigna staff discouraged the use of cheaper alternatives to Humira, a treatment for arthritis and autoimmune conditions that cost $90,000 per year, even though a biosimilar was available at half the price.
Additionally, the committee found that Express Scripts informed patients they would pay more to fill a prescription at their local pharmacy than if they obtained a three-month supply from the company’s affiliated mail-order pharmacy, thereby limiting patients’ pharmacy choices.
A similar report by the U.S. Federal Trade Commission (FTC) earlier this month stated that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.”
The FTC expressed concern, noting, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This system allows “vertically integrated PBMs to prefer their own affiliated businesses, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.”
FTC Chair Lina M. Khan highlighted that the findings indicate middlemen are “overcharging patients for cancer drugs,” generating additional revenue of more than $1 billion.