Pharmacy benefit managers (PBMs) are directing patients towards higher-cost medications and restricting their access to various pharmacies, as revealed in a recent report by the House Committee on Oversight and Accountability.
The report, which followed a 32-month investigation by the committee, is expected to be discussed during an upcoming hearing featuring executives from the largest PBMs in the country, as noted by the Wall Street Journal.
PBMs act as intermediaries for prescription drug plans offered by health insurers. They engage in negotiations with drug manufacturers to determine pricing and also establish the out-of-pocket expenses patients face.
The leading PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—collectively handle around 80% of all prescriptions in the country.
According to the committee’s findings, PBMs have established lists of preferred medications that favor more expensive brand-name drugs over less costly alternatives. One example highlighted in the report includes internal communications from Cigna discouraging the use of cheaper alternatives to Humira, an arthritis treatment that cost $90,000 annually, despite the availability of a biosimilar priced at half that amount.
Additionally, the report revealed that Express Scripts informed patients that obtaining a three-month prescription from their affiliated mail-order pharmacy would be less expensive than using a local pharmacy, thereby limiting patients’ options in selecting where to fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that increased vertical integration among PBMs has allowed the largest six firms to manage nearly 95% of all prescriptions filled nationwide.
These developments are alarming, with the FTC stating that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” The situation fosters conditions where “vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can harm independent pharmacies and drive up drug costs.”
FTC Chair Lina M. Khan emphasized that these findings indicate that PBMs are “overcharging patients for cancer drugs,” generating more than $1 billion in additional revenue as a result.