A recent report from the House Committee on Oversight and Accountability has raised serious concerns about the practices of pharmacy-benefit managers (PBMs), indicating that they are directing patients toward higher-cost medications while restricting the options available to them. This investigation, lasting 32 months, precedes an upcoming hearing where top executives from the largest PBMs will be questioned.
PBMs are crucial entities that act as intermediaries between health insurers and pharmaceutical companies, negotiating drug prices and determining patients’ out-of-pocket costs. Notably, Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark together manage around 80% of prescriptions filled in the United States.
The report highlights that PBMs have developed lists of preferred medications that often prioritize expensive brand-name drugs over more affordable alternatives. An example cited includes communications from Cigna that recommended brand-name drugs like Humira, which can cost patients as much as $90,000 annually, despite the existence of a biosimilar that is significantly cheaper.
Additionally, the findings revealed that Express Scripts has been steering patients toward its mail-order pharmacy, suggesting that those who use their local pharmacy might incur higher costs. This practice restricts patient choices, limiting where they can obtain their medications.
The issues raised by these practices suggest a troubling trend in the healthcare industry. According to a recent report by the U.S. Federal Trade Commission (FTC), the dominance of PBMs in the prescription drug market means that they manage nearly 95% of all prescriptions in the country. This concentration of power raises concerns about potential conflicts of interest, as vertically integrated PBMs may favor their own affiliated businesses at the expense of independent pharmacies, ultimately driving up drug costs for consumers.
FTC Chair Lina M. Khan highlighted that these middlemen are significantly increasing expenses for patients, notably associated with cancer drugs, resulting in over $1 billion in extra revenue for PBMs.
In summary, the findings of this report indicate a need for greater transparency and accountability in the operations of PBMs to ensure fair access to affordable medication for all patients. While the situation appears dire, there is hope for reform through increased scrutiny and legislative attention that could lead to a more equitable healthcare system benefiting both patients and pharmacies.