A recent report from the House Committee on Oversight and Accountability indicates that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their options for obtaining them. This report, which was reviewed by the Wall Street Journal, emerged after a 32-month investigation and precedes a hearing featuring executives from the country’s largest PBMs.
PBMs act as intermediaries between health insurers and pharmaceutical companies, negotiating drug prices and determining out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control nearly 80% of all prescriptions.
The report highlights that PBMs have been favoring high-priced brand-name drugs over more affordable alternatives. It cites instances, such as Cigna staff discouraging the use of cheaper alternatives to Humira, an arthritis treatment costing $90,000 annually, despite the availability of a biosimilar at half the price.
Furthermore, the committee revealed that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies instead of through their affiliated mail-order pharmacy, thus limiting patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that increased consolidation among the six largest PBMs allows them to oversee nearly 95% of all prescriptions in the U.S. The FTC expressed concern over PBMs’ significant influence over patients’ access to affordable prescriptions, suggesting that their vertical integration poses conflicts of interest that could harm independent pharmacies and elevate drug prices.
FTC Chair Lina M. Khan pointed out that these middlemen are reportedly “overcharging patients for cancer drugs,” earning over $1 billion in additional revenue from this practice.