Pharmacy benefit managers (PBMs) are directing patients toward costlier medications while restricting their choices regarding where to obtain them, according to a new report released by the House Committee on Oversight and Accountability.
The report, obtained by the Wall Street Journal, comes after a thorough 32-month investigation by the committee ahead of a hearing involving executives from the country’s largest PBMs.
PBMs function as third-party administrators for prescription drug plans offered by health insurers. Their role includes negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients.
The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage around 80% of all prescriptions in the country.
The committee’s report revealed that these PBMs have developed lists of preferred medications that favor higher-priced brand-name drugs over more affordable generics. For instance, emails from Cigna highlighted the discouragement of using cheaper options for Humira, a medication for arthritis and other autoimmune disorders, which cost approximately $90,000 annually, despite the availability of a biosimilar at half the price.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to receiving a three-month supply from their affiliated mail-order service. This practice effectively limited patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission released a similar report, indicating that increased vertical integration among PBMs has allowed the six largest firms to manage nearly 95% of all prescriptions filled across the nation.
The findings raise serious concerns. The FTC noted that major PBMs hold significant power over Americans’ access to and affordability of prescription drugs. The system potentially enables vertically integrated PBMs to favor their own businesses, creating conflicts of interest that disadvantage independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan emphasized that these middlemen are overcharging patients for cancer medications, generating over $1 billion in additional revenue.