A recent report from the House Committee on Oversight and Accountability highlights concerns regarding pharmacy-benefit managers (PBMs), which are directing patients toward higher-cost medications and restricting access to pharmacies.
The investigation, lasting over 32 months, indicated that Medicare patients could potentially save $1.5 billion on ten specific prescription drugs. The report, cited by the Wall Street Journal, was released in anticipation of a hearing featuring executives from the country’s leading PBM firms.
PBMs operate as intermediaries for prescription drug plans associated with health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients. The United States’ three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions in the country.
The committee’s investigation revealed that these managers often offer preferred drug lists that favor high-cost brand-name drugs over cheaper alternatives. For instance, Cigna staff were found to have discouraged the use of lower-cost alternatives to Humira, a medication for arthritis and autoimmune disorders that had a price tag of $90,000 per year, even though a biosimilar was available for half that amount.
Furthermore, the committee noted that Express Scripts informed patients they would incur higher costs by using local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, effectively limiting patients’ pharmacy choices.
A similar report from the U.S. Federal Trade Commission (FTC) stated that increased vertical integration has enabled the six largest PBMs to control nearly 95% of all prescriptions in the U.S. This concentration raises alarm over the significant power these PBMs hold over patients’ access to affordable medications. The FTC warned that such a setup leads to conflicts of interest, potentially disadvantaging independent pharmacies and inflating drug costs.
FTC Chair Lina M. Khan remarked on the concerning findings, which suggest that these intermediaries are overcharging patients for cancer treatments, resulting in excess revenue exceeding $1 billion.