A recent report by the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their pharmacy options. This investigation spanned 32 months and precedes a hearing featuring executives from the leading PBM companies in the country.
PBMs serve as third-party administrators of prescription drug plans for health insurers, negotiating drug prices with pharmaceutical companies and determining patient out-of-pocket expenses. Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark dominate the U.S. market, managing about 80% of prescription medications.
The committee’s findings indicate that PBMs compile lists of preferred drugs that favor pricier brand-name options over their cheaper counterparts. For instance, emails from Cigna staff discouraged the use of lower-cost alternatives to Humira, a medication for arthritis, which at the time cost $90,000 annually, despite the existence of biosimilars available for half that price.
Furthermore, Express Scripts reportedly informed patients that they would incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply from its affiliated mail-order pharmacy, thereby reducing patient choice.
The U.S. Federal Trade Commission (FTC) released a similar report earlier this month, noting that increased consolidation among the six largest PBMs now allows them to manage nearly 95% of all filled prescriptions in the United States. The FTC’s findings raise concerns over the significant influence these PBMs have on Americans’ access to affordable medications. They suggest that vertically integrated PBMs may prioritize their own affiliated businesses, potentially disadvantaging independent pharmacies and driving up drug costs.
FTC Chair Lina M. Khan stated that these middlemen have been “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.