Pharmacy benefit managers (PBMs) are directing patients toward higher-cost medications while restricting their pharmacy options, according to a recent report from the House Committee on Oversight and Accountability.
This report, which was reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee prior to a hearing involving executives from the country’s largest PBMs.
PBMs act as intermediaries for health insurers in managing prescription drug plans. They negotiate pricing with pharmaceutical companies and define the out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—control roughly 80% of all prescriptions filled in the U.S.
The committee’s findings indicated that these PBMs maintain lists of preferred medications that favor more expensive brand-name drugs over lower-cost alternatives. For instance, the report references internal correspondence from Cigna that discouraged using cheaper substitutes for Humira, an arthritis and autoimmune treatment that had a price tag of $90,000 annually, despite the availability of a biosimilar at half that price.
Additionally, the report highlighted that Express Scripts informed patients they would pay more for prescriptions filled at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. Such practices limit patients’ choices regarding where they can fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report stating that the rising vertical integration among PBMs has allowed the six largest managers to control nearly 95% of all prescriptions filled in the U.S.
The FTC report raised concerns, asserting that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” It warned that an integrated PBM system could lead to conflicts of interest that disadvantage non-affiliated pharmacies while raising drug prices. FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” resulting in an estimated excess revenue of over $1 billion.