A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while limiting their options for obtaining these drugs. This report, which followed a 32-month investigation, was shared prior to a committee hearing featuring executives from the nation’s largest PBMs.
PBMs serve as intermediaries for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies and determining the out-of-pocket expenses for patients. The three largest PBMs in the U.S., Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, collectively manage about 80% of prescription drug transactions.
The committee’s findings indicate that PBMs maintain lists of preferred medications, favoring higher-priced brand-name drugs over cost-effective alternatives. For instance, emails from Cigna referenced in the report suggested discouraging the use of cheaper alternatives to Humira, a drug used for treating arthritis and other autoimmune disorders, which costs around $90,000 annually. In contrast, at least one biosimilar option was available for half that price.
Additionally, the committee highlighted that Express Scripts informed patients they could incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply via their affiliated mail-order pharmacy. This practice limits the choices available to patients regarding their pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that growing vertical integration and concentration have allowed the six largest PBMs to handle nearly 95% of all prescriptions in the U.S. The FTC raised concerns about the significant power these leading PBMs have over Americans’ access to affordable prescription drugs, suggesting that this setup leads to conflicts of interest where PBMs may prioritize their affiliated businesses, thus raising drug costs for consumers.
FTC Chair Lina M. Khan stated that the findings indicate these middlemen have been “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.