A recent report from the House Committee on Oversight and Accountability reveals that pharmacy benefit managers (PBMs) are directing patients towards more costly medications while restricting their pharmacy options.
The report, which emerged after a 32-month investigation and was reviewed by the Wall Street Journal, is linked to an upcoming hearing featuring executives from major PBM companies. PBMs act as intermediaries that manage prescription drug plans for health insurers and negotiate prices with pharmaceutical companies. Additionally, they determine the out-of-pocket expenses for patients.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (a subsidiary of UnitedHealth Group), and Caremark (part of CVS Health)—oversee about 80% of prescription medications in the country.
Findings in the committee’s report indicate that these managers often promote higher-priced brand-name drugs over less expensive alternatives. An example highlighted is an internal communication from Cigna that suggested avoiding cheaper substitutes for Humira, a medication for arthritis and autoimmune disorders, which was priced at $90,000 annually, compared to at least one biosimilar available for half that cost.
Moreover, the report noted that Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies versus obtaining a three-month supply through its mail-order service, thereby limiting patient choices in pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a similar report, indicating that the six largest PBMs control nearly 95% of all prescriptions filled across the United States. The FTC expressed concern over the substantial influence these PBMs wield over American patients’ access to and affordability of medications. The report points out that this vertical integration creates conflicts of interest, allowing PBMs to favor their own businesses and increasing overall prescription drug costs.
FTC Chair Lina M. Khan emphasized the troubling nature of these findings, stating that PBMs are effectively “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for these middlemen.