A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward pricier medications and restricting their access to pharmacies.
The report, which has been reviewed by the Wall Street Journal, is the result of a 32-month investigation and precedes a hearing that will feature executives from the country’s largest PBMs.
PBMs serve as intermediaries for prescription drug plans on behalf of health insurers. They negotiate with drug manufacturers over the prices that health plans will pay for medications and determine the out-of-pocket costs to patients.
The biggest PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health)—control around 80% of prescriptions in the country.
According to the findings, PBMs are producing lists of preferred drugs that favor higher-priced brand-name medications over less expensive alternatives. For instance, the report highlights emails from Cigna that recommended against using cheaper substitutes for Humira, an arthritis medication that costs $90,000 annually, despite the availability of a biosimilar at half that cost.
In another instance, Express Scripts informed patients that obtaining a prescription from their local pharmacy would be more expensive than getting a three-month supply through their affiliated mail-order service, thereby limiting patients’ choice in pharmacies.
A similar report was released by the U.S. Federal Trade Commission (FTC) earlier this month. The FTC indicated that due to growing vertical integration, the six largest PBMs now handle nearly 95% of all prescriptions filled in the U.S.
These developments raise alarm. The FTC stated, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” They also pointed out that vertically integrated PBMs may favor their affiliated enterprises, which could disadvantage independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” resulting in additional revenue exceeding $1 billion.