A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications and restricting their pharmacy choices. The report, which was reviewed by the Wall Street Journal, emerged from a 32-month investigation preceding a hearing involving executives from the nation’s largest PBMs.
PBMs function as third-party administrators for prescription drug plans offered by health insurers. They negotiate pricing with pharmaceutical companies and determine the out-of-pocket expenses for patients. The three largest PBMs in the U.S., Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (a CVS Health subsidiary), collectively manage around 80% of all U.S. prescriptions.
The committee’s findings indicate that PBMs are promoting lists of preferred medications that emphasize more expensive brand-name drugs rather than cheaper generic options. An example highlighted in the report involves Cigna, which reportedly discouraged patients from using lower-cost alternatives to Humira, an arthritis and autoimmune treatment priced at approximately $90,000 annually, while a biosimilar was available for about half that amount.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thus limiting patient choices regarding where to fill prescriptions.
Furthermore, the U.S. Federal Trade Commission (FTC) published a related report earlier this month, indicating that increased vertical integration and market concentration have allowed the six largest PBMs to control nearly 95% of all prescriptions dispensed in the nation. The FTC’s interim report expresses concerns over the significant power these leading PBMs hold over Americans’ access and affordability of prescription drugs. It suggests that the vertically integrated PBMs may favor their affiliated businesses, leading to conflicts of interest that could undermine unaffiliated pharmacies and elevate drug prices.
FTC Chair Lina M. Khan commented that these findings reveal how these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.