A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards higher-priced medications while restricting where they can access them. The report, which followed a 32-month investigation, is set to be discussed in an upcoming hearing featuring executives from the largest PBM companies in the country.
PBMs, which act as intermediaries administering prescription drug plans for health insurers, negotiate with pharmaceutical companies to determine drug pricing and also set patients’ out-of-pocket costs. The three largest PBMs in the U.S.—Express Scripts, OptumRx (a UnitedHealth Group subsidiary), and Caremark (a CVS Health subsidiary)—manage about 80% of all U.S. prescriptions.
According to the report, PBMs have compiled preferred drug lists that favor more expensive brand-name medications over less costly alternatives. For instance, emails from Cigna staff discouraged the use of cheaper alternatives to Humira, a treatment for autoimmune conditions that was priced at $90,000 annually, while at least one biosimilar was available at half that rate.
The committee discovered that Express Scripts informed patients that obtaining a prescription at their local pharmacy would lead to higher costs than purchasing a three-month supply through its affiliated mail-order service. This practice limits patients’ choices regarding their pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that increased vertical integration and market concentration has allowed the six largest PBMs to fill nearly 95% of prescriptions in the country. The FTC expressed concern over the significant power these PBMs hold over Americans’ access to affordable prescription medications. The report warned that the structure creates conflicts of interest that could disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan highlighted that these middlemen are reportedly overcharging patients for cancer medications, resulting in excess revenue of more than $1 billion.