A recent report from the House Committee on Oversight and Accountability alleges that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy options. This report comes after a 32-month investigation by the committee, which is set to hold hearings involving executives from the largest PBM companies in the country.
PBMs serve as third-party administrators for prescription drug plans associated with health insurers. They play a critical role in negotiating drug prices with pharmaceutical companies and determining patients’ out-of-pocket costs. The nation’s three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—manage about 80% of prescriptions in the United States.
The findings indicate that PBMs tend to prioritize more costly brand-name drugs over cheaper alternatives on their preferred drug lists. The report cites internal communications from Cigna that advised against using more affordable substitutes for Humira, a drug for arthritis and other autoimmune diseases, which was priced at $90,000 annually, despite the existence of a biosimilar available for half that price.
Further, the investigation uncovered that Express Scripts informed patients they would incur higher costs if they filled prescriptions at their local pharmacy rather than using its affiliated mail-order service, effectively limiting patients’ choices regarding their pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, emphasizing that increased vertical integration among PBMs allows the six largest of these firms to control nearly 95% of all prescriptions filled in the country.
The FTC expressed concerns over the significant influence PBMs hold over Americans’ access to affordable medications, highlighting a system in which vertically integrated PBMs may prioritize their own affiliated services, leading to conflicts of interest that disadvantage independent pharmacies and elevate prescription drug prices. FTC Chair Lina M. Khan pointed out that these middlemen are effectively overcharging patients for cancer medications, leading to an excess revenue of over $1 billion.