A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards higher-priced medications and restricting their choice of pharmacies.
The report, examined by the Wall Street Journal, stems from a 32-month investigation conducted by the committee prior to an upcoming hearing featuring executives from the largest PBMs in the country. PBMs operate as intermediaries for health insurers, negotiating the prices that insurers pay for medications and establishing the out-of-pocket costs for patients.
The three dominant PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—manage about 80% of prescriptions in the United States. The committee’s findings suggest that these managers prefer more expensive brand-name drugs over less costly alternatives when compiling their lists of preferred medications.
For instance, the report highlights internal communications from Cigna that discouraged the use of cheaper alternatives to Humira, an arthritis treatment that was priced at around $90,000 annually, despite the availability of a biosimilar for half that cost.
Additionally, the committee uncovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to using its affiliated mail-order service, effectively limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report indicating that increasing consolidation among PBMs has enabled the six largest of these intermediaries to control nearly 95% of all prescriptions filled in the U.S.
The FTC’s findings raise significant concerns. It stated that “leading PBMs now wield considerable influence over Americans’ access to and affordability of prescription medications,” which fosters a system where integrated PBMs might prefer their own businesses, leading to conflicts of interest that could disadvantage independent pharmacies while heightening drug costs for consumers.
FTC Chair Lina M. Khan remarked that these middlemen are “overcharging patients for cancer drugs,” which yields over $1 billion in extra revenue.