A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their pharmacy choices. The findings were based on a 32-month investigation leading up to a hearing featuring executives from major PBM firms.
PBMs serve as intermediaries in the prescription drug sector, representing health insurers and negotiating prices with pharmaceutical companies. They also determine the out-of-pocket expenses for patients. The three largest PBMs in the U.S.—Express Scripts, OptumRx (owned by UnitedHealth Group), and Caremark (part of CVS Health)—handle about 80% of all prescriptions in the country.
The committee’s report indicates that PBMs maintain lists of preferred drugs that primarily feature higher-priced brand-name products rather than more affordable alternatives. An example highlighted in the report includes emails from Cigna employees that discouraged the use of cheaper substitutes for Humira, a medication for arthritis and other autoimmune diseases, which had a price tag of $90,000 annually, even though a biosimilar was available for about half that price.
Additionally, the report states that Express Scripts informed patients they would incur higher costs by filling their prescriptions at local pharmacies as opposed to receiving a three-month supply from its partnered mail-order service. This practice effectively limits patient choices regarding pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report noting that the increasing centralization and vertical integration within the industry have allowed the top six PBMs to control nearly 95% of prescriptions filled in the U.S. The FTC expressed concern over the significant power these PBMs wield, impacting Americans’ access to affordable medications. They also highlighted potential conflicts of interest, as vertically integrated PBMs may favor their own businesses, potentially disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan pointed out that these middlemen appear to be overcharging patients for cancer medications, boosting their revenues by over $1 billion.