A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications and restricting their pharmacy options. This report follows a thorough 32-month investigation leading up to a hearing with executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket expenses. The three largest PBMs in the U.S., Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, manage about 80% of prescription drugs in the country.
According to the committee’s findings, PBMs have constructed lists of preferred medications that often prioritize costly brand-name options over more affordable alternatives. For instance, the report references emails from Cigna staff that discouraged the use of cheaper alternatives to Humira, a treatment for arthritis and other autoimmune diseases, which carries a yearly cost of $90,000, despite the availability of a biosimilar at half that price.
Moreover, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to using its affiliated mail-order service, thereby limiting patient choice in pharmacy selection.
Similarly, a recent report from the Federal Trade Commission (FTC) highlighted concerns regarding the dominance of PBMs. The FTC’s interim report indicated that the six largest PBMs control nearly 95% of all prescriptions filled in the United States, raising alarms about their power in dictating access and affordability of medications.
The FTC expressed concerns that such concentration allows leading PBMs to exert significant influence over prescription drug accessibility for Americans. This situation fosters a structure where vertically integrated PBMs may prioritize their own affiliated businesses, creating potential conflicts of interest that harm independent pharmacies and inflate drug prices. FTC Chair Lina M. Khan noted that these middlemen could be overcharging patients for cancer drugs, contributing an excess revenue of over $1 billion.