A recent report by the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their pharmacy options. This investigation, which spanned 32 months, was conducted in anticipation of a hearing featuring executives from the largest PBMs in the country.
PBMs act as third-party administrators for prescription drug plans, negotiating pricing between health insurers and pharmaceutical firms, while also determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx (a part of UnitedHealth Group), and Caremark (owned by CVS Health)—control approximately 80% of prescriptions filled in the U.S.
The committee’s findings indicate that PBMs tend to favor higher-priced brand-name drugs over more affordable alternatives when crafting lists of preferred medications. An example cited was an internal communication from Cigna discouraging the use of more economical alternatives to Humira, an arthritis treatment costing around $90,000 annually, despite the availability of a biosimilar at half the price.
Additionally, Express Scripts informed patients that they would incur higher costs when filling prescriptions at their local pharmacies compared to obtaining a three-month supply via its associated mail-order service, thus limiting choices for patients.
Earlier in the month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that increased consolidation in the industry has allowed the top six PBMs to manage nearly 95% of all prescriptions filled in the U.S. This raise concerns about the significant control these PBMs have over patient access to affordable medications.
FTC Chair Lina M. Khan highlighted that the practices of these middlemen have resulted in higher charges for patients, specifically for cancer medications, generating an additional revenue exceeding $1 billion for the PBMs.