A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while limiting their options for obtaining them. This report, reviewed by the Wall Street Journal, is the culmination of a 32-month investigation and precedes a hearing that will feature executives from the largest PBMs in the country.
PBMs act as intermediaries for health insurers, negotiating costs for prescription drugs with pharmaceutical companies and determining patient out-of-pocket expenses. The top three PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescription drug transactions in the United States.
The investigation found that these PBMs often create preferred drug lists that prioritize high-priced brand-name medications over more affordable alternatives. One specific instance highlighted in the report involved internal communications at Cigna, where staff discouraged the use of less expensive substitutes for Humira, a treatment for arthritis costing around $90,000 annually, despite the availability of a similar, lower-cost biosimilar.
Furthermore, the committee discovered that Express Scripts informed patients they would pay less for a three-month supply of medication through its affiliated mail-order service compared to their local pharmacy, effectively restricting patient choice in pharmacy selection.
This development echoes findings from the U.S. Federal Trade Commission (FTC), which released a similar report earlier this month. The FTC noted that heightened vertical integration and market concentration have enabled the six largest PBMs to control nearly 95% of all prescriptions in the U.S.
The implications are concerning, according to the FTC. They stated that the leading PBMs wield substantial influence over access to and affordability of prescription medications for Americans. The system has led to vertically integrated PBMs potentially favoring their own businesses, creating conflicts of interest that may harm independent pharmacies and escalate drug costs. FTC Chair Lina M. Khan remarked that these middlemen are significantly inflating prices for cancer medications, generating over $1 billion in additional revenue.