According to a recent report by the House Committee on Oversight and Accountability, pharmacy-benefit managers (PBMs) are guiding patients toward more expensive medications and restricting their options for obtaining these drugs. This findings come after a 32-month investigation ahead of a hearing involving major PBM executives.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers. They negotiate prices with pharmaceutical companies and establish the out-of-pocket costs that patients must pay. The three largest PBMs in the U.S.—Express Scripts, OptumRx (UnitedHealth Group), and Caremark (CVS Health)—account for approximately 80% of all prescriptions filled in the country.
The report indicates that these PBMs have developed lists of preferred medications that often favor higher-priced branded drugs over more affordable alternatives. An example highlighted in the report involves Cigna staff discouraging the use of cheaper alternatives to Humira, a drug for arthritis and autoimmune conditions, which was priced at $90,000 annually at the time, despite the availability of a biosimilar for half that cost.
Furthermore, findings reveal that Express Scripts informed patients that they would incur higher costs when filling prescriptions at local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service. This practice effectively limits patients’ choices regarding where to fill their prescriptions.
A similar report from the U.S. Federal Trade Commission (FTC) noted that increasing consolidation has allowed the six largest PBMs to control nearly 95% of all U.S. prescriptions. The FTC expressed concern, stating, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs,” while also highlighting conflicts of interest arising from PBMs favoring their own affiliated businesses.
FTC Chair Lina M. Khan emphasized that the findings illustrate how these middlemen are overcharging patients for cancer medications, which generates excess revenue exceeding $1 billion.