A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their options regarding where to obtain prescriptions.
The investigation, which lasted 32 months and culminated in a hearing featuring executives from the country’s largest PBMs, highlighted that Medicare patients could potentially save $1.5 billion on ten specific prescription drugs, as noted in the report reviewed by the Wall Street Journal.
PBMs function as intermediaries for prescription drug plans associated with health insurers, negotiating pricing for medications and determining out-of-pocket costs for patients. The largest three PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—control around 80% of prescription medications.
According to the committee’s findings, these PBMs have established preferred drug lists that prioritize higher-priced brand-name drugs over more affordable alternatives. The report references internal communications from Cigna that discouraged the use of cheaper alternatives to Humira, an arthritis treatment with an annual cost of $90,000, despite the availability of a biosimilar at half that price.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice restricts patients’ choices concerning pharmacies.
The U.S. Federal Trade Commission recently released a similar report, indicating that increasing integration and concentration within the industry has allowed the six largest PBMs to manage nearly 95% of all prescriptions in the country. The FTC expressed concern about the considerable influence these leading PBMs wield over Americans’ access to and affordability of prescription drugs. They also noted that vertically integrated PBMs might favor their affiliated businesses, introducing conflicts of interest that could harm independent pharmacies and elevate drug costs.
FTC Chair Lina M. Khan emphasized that the findings illustrate how these middlemen are overcharging patients for essential medications, particularly cancer treatments, resulting in additional revenue exceeding $1 billion.