A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their choices in pharmacies. This report, which followed a 32-month investigation, was reviewed by the Wall Street Journal ahead of a hearing featuring executives from the nation’s largest PBMs.
PBMs, which act as third-party administrators for prescription drug plans for health insurers, negotiate with pharmaceutical companies regarding drug prices and determine patients’ out-of-pocket costs. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—together manage about 80% of all prescriptions.
The committee’s investigation found that these PBMs often prioritize higher-cost brand-name drugs over cheaper alternatives on their preferred drug lists. Cigna, for instance, was noted for discouraging the use of less expensive substitutes for Humira, a treatment for arthritis costing around $90,000 annually, despite the availability of a biosimilar at half that price.
Additionally, Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thereby limiting patient options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report highlighting that the concentration of power among the six largest PBMs now enables them to manage nearly 95% of all prescriptions filled in the U.S. The FTC expressed concern over the significant power these PBMs wield in controlling access to affordable medications. They noted that vertically integrated PBMs might favor their own affiliated businesses, which could lead to conflicts of interest that harm independent pharmacies and lead to higher drug prices.
FTC Chair Lina M. Khan emphasized that the report’s findings suggest that these middlemen are overcharging patients for cancer medications, generating over $1 billion in additional revenue for themselves.