A new report from the House Committee on Oversight and Accountability has revealed that pharmacy benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy options. This finding comes after a 32-month investigation and prepares for an upcoming hearing where executives from the country’s largest PBMs will testify.
PBMs function as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate prices with pharmaceutical companies and determine the out-of-pocket expenses for patients. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescriptions filled nationwide.
The committee’s investigation highlighted that PBMs create lists favoring higher-priced brand medications over more affordable alternatives. An example in the report described how Cigna staff advised against using cheaper substitutes for Humira, an arthritis medication costing around $90,000 annually, despite the availability of biosimilars at half that price.
Additionally, the report noted that Express Scripts informed patients they would incur higher costs at local pharmacies compared to obtaining a three-month supply through its mail-order service, which limited patient pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a report indicating that the significant consolidation among the six largest PBMs allows them to manage nearly 95% of all U.S. prescriptions. The FTC expressed concerns about the power these PBMs wield over drug access and affordability, warning that this vertical integration could disadvantage independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan emphasized the findings, stating that these middlemen may be overcharging patients for cancer medications, generating over $1 billion in additional profit.