Pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications and restricting their access to certain pharmacies, according to a recent report from the House Committee on Oversight and Accountability.
This report, which followed a 32-month investigation, comes ahead of a hearing addressing PBMs and their executives from the largest management companies in the country.
PBMs act as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate prices with pharmaceutical companies, determining how much health plans will pay for medications. They also establish 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—are responsible for managing approximately 80% of U.S. prescriptions.
The committee’s findings indicate that PBMs have developed lists of preferred medications that often prioritize pricier brand names over more affordable options. For instance, the report highlights communications from Cigna staff that actively discouraged the use of cheaper substitutes for Humira, a treatment costing $90,000 annually at that time, despite the availability of a biosimilar at half that price.
Furthermore, Express Scripts reportedly informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to ordering a three-month supply from its affiliated mail-order service, thereby restricting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report indicating that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95% of all prescriptions filled in the United States.”
The findings are alarming. The FTC stated that leading PBMs possess considerable power over Americans’ access to and affordability of prescription drugs. This situation fosters an environment where “vertically integrated PBMs appear to have the ability and incentive to favor their own affiliated businesses, creating conflicts of interest that can disadvantage non-affiliated pharmacies and inflate prescription costs.”
FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.