Pharmacy-benefit managers (PBMs) have been found to direct patients toward more costly medications while restricting their choice of pharmacies, according to a recent report from the House Committee on Oversight and Accountability.
This report, which the Wall Street Journal has seen, is the result of a 32-month investigation conducted by the committee ahead of a hearing involving executives from the nation’s leading PBMs.
PBMs act as intermediaries administering prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of the nation’s prescriptions.
The report reveals that PBMs maintain lists of preferred medications that include higher-priced brand-name drugs rather than more affordable alternatives. For instance, emails from Cigna employees discouraged the use of less expensive alternatives to Humira, a drug for arthritis and autoimmune diseases that cost $90,000 annually, despite the availability of biosimilars priced at half that amount.
Additionally, the investigation highlighted that Express Scripts informed patients they would incur higher costs if they opted to fill prescriptions at their local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, effectively narrowing patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, indicating that the top six PBMs now oversee nearly 95% of all prescription fills in the country due to increasing vertical integration and market concentration. The FTC expressed concerns over the significant power PBMs have over Americans’ access to and affordability of prescription medications, suggesting that this vertical integration presents conflicts of interest that can negatively impact independent pharmacies and contribute to rising drug prices.
FTC Chair Lina M. Khan emphasized that these middlemen are driving up costs for patients, particularly for cancer medications, generating over $1 billion in added revenue.