Pharmacy-benefit managers (PBMs) are allegedly directing patients toward pricier medications and restricting their pharmacy options, as revealed in a report from the House Committee on Oversight and Accountability.
This report follows a 32-month investigation by the committee in advance of a hearing featuring executives from the largest PBMs in the nation. The findings were brought to light by the Wall Street Journal.
PBMs serve as third-party administrators of prescription drug plans for health insurance companies, negotiating drug prices with pharmaceutical manufacturers and determining patient out-of-pocket costs. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control approximately 80% of prescriptions filled in the United States.
According to the committee’s report, PBMs tend to favor higher-priced brand-name medications in their preferred drug lists over more economical alternatives. An example highlighted involved Cigna staff discouraging the use of biosimilars for Humira, a costly medication for arthritis and autoimmune conditions, which priced at $90,000 annually, while a less expensive biosimilar was available for about half that cost.
Additionally, the report indicated that Express Scripts informed patients they would incur higher costs filling prescriptions at local pharmacies compared to obtaining a three-month supply from their mail-order pharmacy. This practice limits patients’ pharmacy choices.
A similar report was released by the U.S. Federal Trade Commission (FTC) earlier this month, stating that growing vertical integration and concentration within the industry has allowed the six largest PBMs to manage nearly 95% of prescriptions in the U.S.
The FTC expressed concerns about the significant power now held by leading PBMs over American access to affordable prescription drugs. This situation fosters a system where vertically integrated PBMs can prioritize their own affiliated businesses, leading to potential conflicts of interest that may disadvantage independent pharmacies and raise drug prices.
FTC Chair Lina M. Khan noted that the findings indicate these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.