According to a recent report from the House Committee on Oversight and Accountability, pharmacy-benefit managers (PBMs) are directing patients toward more costly medications and restricting their options for accessing these drugs. This report follows an extensive 32-month investigation by the committee, which is preparing for a hearing featuring executives from the largest PBM organizations in the country.
PBMs serve as third-party administrators for prescription drug plans of health insurers. Their roles include negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses for medications. The largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—are responsible for managing about 80% of prescriptions filled in the country.
The committee’s findings indicate that PBMs maintain preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, the report mentions communications from Cigna staff that discouraged the use of more cost-effective alternatives to Humira, a drug for arthritis and autoimmune conditions that had a price tag of $90,000 per year, despite at least one similar medication being available for half that amount.
Furthermore, 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 from its affiliated mail-order service. This practice effectively limits patients’ choices for pharmacy services.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a comparable report noting that increasing vertical integration among the six largest PBMs allows them to oversee nearly 95% of all prescriptions filled in the U.S. The FTC expressed concern, stating that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” The report suggests that vertically integrated PBMs might prioritize their own affiliated businesses, leading to conflicts of interest that can disadvantage independent pharmacies and drive up drug prices.
FTC Chair Lina M. Khan highlighted that these developments have resulted in PBMs “overcharging patients for cancer drugs,” generating excess revenue exceeding $1 billion for these middlemen.