A recent report from the House Committee on Oversight and Accountability has raised significant concerns about the practices of pharmacy benefit managers (PBMs), highlighting their inclination to direct patients towards pricier medications while restricting their options for drug procurement. The findings come after a 32-month investigation in advance of an upcoming hearing featuring executives from major PBMs.
PBMs serve as intermediaries who manage prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The largest PBMs in the U.S., including Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health, collectively oversee about 80% of the nation’s prescriptions.
According to the report, PBMs have developed preferred drug lists that promote higher-cost brand-name medications over more affordable alternatives. For instance, the document references internal communication from Cigna that discouraged the choice of cheaper alternatives to Humira, a medication prescribed for arthritis and other autoimmune disorders costing around $90,000 annually, despite the availability of a biosimilar at nearly half the price.
Moreover, it was revealed that Express Scripts advised patients that they would incur greater costs by filling prescriptions at local pharmacies compared to purchasing a three-month supply through their affiliated mail-order service, thereby limiting patient choice and flexibility concerning pharmacies.
Echoing these concerns, the U.S. Federal Trade Commission (FTC) released a similar report earlier in the month, indicating that increased consolidation among PBMs has led to these entities controlling approximately 95% of all prescriptions filled in the United States. The FTC’s report characterized the current landscape as troubling, noting that the dominant PBMs hold considerable influence over American patients’ access to and affordability of prescription medications. The report further suggests that the vertical integration of PBMs gives them the potential and incentive to favor their own affiliated operations, giving rise to conflicts of interest that can inflate drug costs and disadvantage independent pharmacies.
FTC Chair Lina M. Khan highlighted that these findings reveal that PBMs are effectively overcharging patients for essential medications, including cancer treatments, leading to additional revenue exceeding $1 billion for these intermediaries.
Though the situation appears dire, there is room for optimism as these revelations could inspire regulatory reforms to ensure fairer practices in the PBM industry. Increased scrutiny may lead to measures that enhance transparency, thereby empowering patients and providers to make more cost-effective choices in their healthcare planning.
In summary, the growing awareness of PBMs’ pricing strategies and their impact on patient care may catalyze significant industry changes aimed at reducing drug costs and enhancing access to necessary medications for all Americans.