Is Your Prescription Costing You More? Inside the PBM Controversy

A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their choices on where to obtain them. This report follows a 32-month investigation by the committee ahead of an upcoming hearing with executives from the country’s largest PBMs.

PBMs function as third-party administrators for prescription drug plans provided by health insurers. They are responsible for negotiating prices with pharmaceutical companies and determining the out-of-pocket costs for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescriptions in the United States.

The report indicates that PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable options. For instance, it references internal communications from Cigna that discouraged the use of lower-cost alternatives to Humira, a medication used for arthritis and other autoimmune diseases that cost approximately $90,000 annually, despite the availability of a biosimilar at half that price.

Additionally, the committee found that Express Scripts informed patients they would incur higher costs by obtaining prescriptions from their local pharmacies compared to ordering a three-month supply through its affiliated mail-order services. This practice limits patient choices regarding pharmacies.

Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, which indicated that the six largest PBMs now manage nearly 95% of all prescriptions filled in the nation. The FTC expressed concerns that the dominant position of these PBMs significantly impacts Americans’ access to affordable medications. The findings suggest that vertically integrated PBMs may prioritize their business interests, creating conflicts that could disadvantage independent pharmacies and escalate drug costs.

FTC Chair Lina M. Khan highlighted that the evidence indicates patients are being overcharged for cancer medications, resulting in excess profits exceeding $1 billion for these middlemen.

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