“Hidden Costs: How Pharmacy Benefit Managers Are Impacting Your Prescription Choices”

Pharmacy benefit managers (PBMs) are directing patients toward more costly medications while restricting their options for obtaining them, according to a recent report released by the House Committee on Oversight and Accountability.

This report, which was reviewed by the Wall Street Journal, comes after a 32-month investigation conducted by the committee in anticipation of a hearing on PBMs that will feature executives from the largest management companies in the nation.

PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies and determine the out-of-pocket costs patients face.

The three largest PBMs in the country—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—manage around 80% of prescriptions filled in the U.S.

The committee’s findings suggest that PBMs have developed preferred drug lists that favor higher-priced brand-name drugs over less expensive alternatives. For instance, the report references internal communications from Cigna that discouraged opting for cheaper alternatives to Humira, a treatment for arthritis and other autoimmune conditions, which at the time cost $90,000 annually. There was at least one biosimilar available for half that price.

Additionally, the committee identified that Express Scripts informed patients they would incur higher costs when filling prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order pharmacy. This practice effectively limits patients’ choices regarding where they can fill their prescriptions.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increased vertical integration and market concentration have allowed the six largest PBMs to control nearly 95% of all prescriptions dispensed in the United States.

The FTC described the findings as concerning, stating that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation fosters a system where “vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can disadvantage independent pharmacies and raise drug prices.”

FTC Chair Lina M. Khan highlighted that the findings reveal these intermediaries are “overcharging patients for cancer drugs,” generating excess revenue exceeding $1 billion.

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