Pharmacy-benefit managers (PBMs) are directing patients toward pricier medications and restricting where they can obtain them, according to a new report from the House Committee on Oversight and Accountability.
The report, as seen by the Wall Street Journal, is the culmination of a 32-month investigation by the committee preceding a hearing on PBMs that involved executives from the largest PBM companies in the country.
PBMs act as third-party administrators for prescription drug plans within health insurers. They negotiate with pharmaceutical companies regarding the cost a health plan will pay for a drug and also determine the out-of-pocket expenses for patients.
Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark, the three largest PBMs in the U.S., manage about 80% of all prescriptions in the country.
The committee’s report revealed that PBMs have compiled lists of preferred medications that include higher-priced brand names rather than cheaper options, according to the Wall Street Journal. For instance, emails from staff at Cigna discouraged the use of less expensive alternatives to Humira, an arthritis and autoimmune treatment that cost $90,000 annually. At the time, at least one biosimilar was available at half the cost.
The report also noted that Express Scripts informed patients they would incur higher costs when filling prescriptions at a local pharmacy compared to obtaining a three-month supply from its associated mail-order pharmacy. This limited patients’ choices regarding which pharmacy they could use.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a similar report. The FTC stated in its interim report that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95% of all prescriptions filled in the United States.”
The FTC findings are concerning. “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription medications,” the FTC said, further noting that “vertically integrated PBMs appear to prefer their affiliated businesses, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.”
FTC Chair Lina M. Khan emphasized that the findings indicate that PBMs could be “overcharging patients for cancer drugs,” resulting in more than $1 billion in additional revenue for these companies.