A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward pricier medications and restricting their pharmacy options. This report, which followed a 32-month investigation, is set to be discussed in an upcoming hearing featuring executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans associated with health insurers, negotiating prices with pharmaceutical companies regarding what health plans will pay for certain drugs. They also determine the out-of-pocket costs for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—account for about 80% of all prescriptions in the United States.
According to the committee’s findings, PBMs have established preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. An example highlighted in the report includes emails from Cigna employees discouraging the use of cheaper substitutes for Humira, a drug for arthritis and other autoimmune disorders that cost around $90,000 annually, despite the availability of a biosimilar at half that price.
Moreover, Express Scripts reportedly informed patients that filling their prescriptions at local pharmacies would be more expensive than obtaining a three-month supply via its affiliated mail-order service, thereby limiting patients’ pharmacy choices.
This report follows a similar investigation by the U.S. Federal Trade Commission (FTC), which noted earlier this month that increased consolidation among PBMs has resulted in the six largest managers overseeing nearly 95% of all U.S. prescriptions. The FTC’s interim report indicated that the power of these leading PBMs significantly affects Americans’ access to affordable medications, citing that vertically integrated PBMs can prioritize their own businesses at the expense of unaffiliated pharmacies, leading to higher drug costs.
FTC Chair Lina M. Khan commented that these findings suggest that PBMs are “overcharging patients for cancer drugs,” generating excess profits exceeding $1 billion.