A new report from 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 findings emerge after a 32-month investigation in advance of a hearing involving executives from the largest PBMs in the country.
PBMs act as third-party administrators for prescription drug plans on behalf of health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle about 80% of all prescriptions in the U.S.
The committee’s findings suggest that PBMs maintain lists of preferred medications that favor higher-priced brand names over less expensive alternatives. For instance, emails from Cigna staff mentioned the discouragement of cheaper alternatives to Humira, an arthritis treatment with an annual cost of $90,000, despite the availability of a similar biosimilar at half the price.
Additionally, Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from their affiliated mail-order service, which limited patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, expressing concern that the increasing concentration of the market allows the six largest PBMs to manage nearly 95% of all prescriptions filled in the United States. The FTC’s findings indicate that leading PBMs hold considerable influence over Americans’ access to affordable medications, suggesting a system that benefits their affiliated businesses while disadvantaging unaffiliated pharmacies, ultimately raising drug costs.
FTC Chair Lina M. Khan pointed out that these intermediaries are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue.