Pharmacy benefit managers (PBMs) are directing patients towards pricier medications and restricting access to them, according to a recent report by the House Committee on Oversight and Accountability.
The report, which was examined by the Wall Street Journal, comes after a 32-month investigation in advance of a hearing featuring executives from the largest PBMs in the country.
PBMs act as intermediaries for prescription drug plans offered by health insurers, negotiating prices with pharmaceuticals and determining out-of-pocket expenses for patients. The three major PBMs – Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health) – control about 80% of prescriptions in the U.S.
The committee’s findings indicate that PBMs have established preferred drug lists that favor more expensive brand-name medications over cheaper alternatives. An example cited includes emails from Cigna discouraging the use of lower-cost alternatives to Humira, a drug for arthritis that at one point cost $90,000 annually, despite the existence of a biosimilar priced at half that amount.
Moreover, the investigation revealed that Express Scripts informed patients they would face higher costs at local pharmacies compared to ordering a three-month supply from its affiliated mail-order services, which restricts patients’ pharmacy options.
In a related report published earlier this month, the U.S. Federal Trade Commission (FTC) highlighted a similar trend, noting that increased concentration among the largest six PBMs has led them to manage nearly 95% of all U.S. prescriptions.
The FTC expressed concern over the significant control currently held by major PBMs over the accessibility and affordability of prescription medications for Americans. This system allegedly allows integrated PBMs to prioritize their affiliated businesses, leading to conflicts of interest that may hurt independent pharmacies and escalate drug costs.
FTC Chair Lina M. Khan pointed out that these middlemen are reportedly “overcharging patients for cancer drugs,” generating over $1 billion in additional revenues.