A recent report from the House Committee on Oversight and Accountability reveals that pharmacy benefit managers (PBMs) may be directing patients towards costlier medications while restricting their pharmacy options. This report follows a 32-month investigation and is timely ahead of a hearing featuring executives from the leading PBMs.
PBMs act as intermediaries for prescription drug plans managed by health insurers. They negotiate with drug manufacturers to determine drug prices covered by health plans and also establish the out-of-pocket expenses that patients must pay.
The three largest PBMs in the United States—Express Scripts, OptumRx (UnitedHealth Group), and Caremark (CVS Health)—cover around 80% of all prescriptions in the country.
The committee’s findings indicate that these PBMs have established preferred drug lists that favor high-cost brand-name medications over more affordable alternatives. Specifically, the report highlights communication from Cigna staff that advised against selecting less expensive options like biosimilars for Humira, a costly treatment for arthritis priced at $90,000 annually, when a more affordable alternative was available for half the cost.
Furthermore, the committee noted that Express Scripts informed patients that it would be cheaper for them to obtain a three-month supply of medication from its affiliated mail-order pharmacy rather than their local pharmacy, thus limiting patient choices for where to fill prescriptions.
An earlier report from the U.S. Federal Trade Commission (FTC) echoed these concerns, stating that the increasing consolidation among PBMs has led the six largest firms to manage nearly 95% of all prescriptions in the U.S. The FTC expressed worry over the substantial influence these leading PBMs have over Americans’ access to and affordability of prescription medications. They warned that this consolidation raises conflicts of interest, as vertically integrated PBMs may prefer their own affiliated entities, potentially harming independent pharmacies and driving up drug costs.
FTC Chair Lina M. Khan pointed out that these middlemen are significantly raising costs for patients, particularly for cancer medications, resulting in an additional $1 billion in revenue for them.