A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their options for pharmacies. This investigation, spanning 32 months, leads up to a hearing featuring executives from the largest PBMs in the country.
PBMs serve as intermediaries between health insurers and pharmaceutical companies, negotiating drug prices and establishing out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control roughly 80% of prescription drug management.
The committee’s report highlights that PBMs tend to favor higher-priced brand-name drugs over more affordable alternatives. For instance, it references correspondence from Cigna employees who discouraged the use of less expensive alternatives to Humira, an arthritis treatment costing around $90,000 annually, despite the availability of a biosimilar at half that price.
Additionally, the committee found evidence that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service. This practice arguably constrains patient choice regarding pharmacy selection.
A parallel report from the U.S. Federal Trade Commission released earlier this month indicated that heightened vertical integration in the industry has allowed the six largest PBMs to handle nearly 95% of all prescriptions in the U.S. The FTC expressed concern over the significant influence these PBMs wield over the accessibility and affordability of prescription medications, which could create conflicts of interest and lead to higher drug prices.
FTC Chair Lina M. Khan stated that the findings demonstrate PBMs are “overcharging patients for cancer drugs,” potentially generating over $1 billion in excess revenue from these practices.