Pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications while restricting their choices regarding where to obtain these drugs, according to a new report from the House Committee on Oversight and Accountability.
The report, reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee in preparation for a hearing with executives from the nation’s largest PBM companies.
PBMs function as third-party administrators for prescription drug plans on behalf of health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients.
The three largest PBMs in the U.S., Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, collectively manage around 80% of prescriptions.
The committee’s findings indicate that PBMs have established lists of preferred medications, favoring more expensive brand-name drugs over cheaper alternatives. An example given in the report highlights communications from Cigna staff that discouraged opting for cheaper substitutes for Humira, a treatment for arthritis and other autoimmune disorders costing $90,000 annually, while a biosimilar option was available at half that price.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs when filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, effectively limiting patients’ pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a related report indicating that increased vertical integration among PBMs has resulted in six large PBMs managing nearly 95% of all prescriptions filled in the United States.
The findings raise significant concerns. The FTC noted that leading PBMs wield considerable power over Americans’ access to affordable prescription medications. The situation fosters an environment where these vertically integrated PBMs may favor their own businesses, leading to conflicts of interest that could disadvantage independent pharmacies and elevate drug costs.
FTC Chair Lina M. Khan stated that the data reveals these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.