Are Pharmacy Benefit Managers Driving Up Your Prescription Costs?

Pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting their pharmacy options, as highlighted in a recent report by the House Committee on Oversight and Accountability.

This report, which followed a 32-month investigation, comes ahead of a hearing involving executives from the largest PBMs in the United States. PBMs serve as intermediaries for prescription drug plans managed by health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket expenses.

The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—account for approximately 80% of all prescriptions in the U.S.

According to the findings, PBMs have established preferred drug lists that often feature higher-priced brand-name medications instead of more affordable alternatives. For instance, the report refers to internal communications from Cigna that discouraged the use of lower-cost options for Humira, a drug used for treating arthritis and autoimmune disorders, which had a cost of $90,000 annually at that time, while a biosimilar was available for about half that price.

Additionally, the committee noted that Express Scripts informed patients they could incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice effectively restricts patient choice regarding pharmacy options.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report stating that increased concentration and vertical integration have allowed the six largest PBMs to control nearly 95% of all prescriptions filled in the country. The FTC expressed concern that these leading PBMs possess considerable power over Americans’ access to and affordability of prescription medications. Furthermore, the agency warned that vertically integrated PBMs may be inclined to favor their affiliated businesses, presenting conflicts of interest that can hinder non-affiliated pharmacies and elevate prescription costs.

FTC Chair Lina M. Khan underscored that the findings demonstrate how these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.

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