Pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting where these medications can be obtained, according to a new report from the House Committee on Oversight and Accountability.
The report, reviewed by the Wall Street Journal, followed a 32-month investigation by the committee in preparation for a hearing on PBMs involving executives from the nation’s largest managers.
PBMs are third-party administrators of prescription drug plans for health insurers. They negotiate with pharmaceutical companies on drug prices and determine patient out-of-pocket costs.
Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, the three largest PBMs in the U.S., manage about 80% of the country’s prescriptions.
The committee’s report found that PBMs have created lists of preferred drugs that favor higher-priced brand names over cheaper alternatives, the Wall Street Journal reported. For instance, emails from staff at Cigna discouraged the use of cheaper alternatives to Humira, a treatment for arthritis and other autoimmune conditions that cost $90,000 annually. A biosimilar was available at half that price.
Additionally, the committee found that Express Scripts told patients they would pay more for filling a prescription at their local pharmacy compared to receiving a three-month supply from its affiliated mail-order pharmacy. This effectively limited patients’ choice of pharmacies.
The U.S. Federal Trade Commission (FTC) released a similar report earlier this month. The FTC stated in its interim report that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.”
The results are concerning. “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs,” the FTC said. This creates a system where “vertically integrated PBMs appear to prefer their own affiliated businesses, causing conflicts of interest that can disadvantage unaffiliated pharmacies and raise prescription drug costs.”
FTC Chair Lina M. Khan stated that the findings reveal middlemen are “overcharging patients for cancer drugs,” generating additional revenue of more than $1 billion.