A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting their pharmacy options. This report highlights that Medicare beneficiaries could potentially save $1.5 billion on ten specific prescription drugs.
The findings, which were reported by the Wall Street Journal, stem from a comprehensive 32-month investigation by the committee in preparation for an upcoming hearing involving top executives from the largest PBMs in the country.
PBMs serve as intermediaries for prescription drug plans offered by health insurers. They negotiate with pharmaceutical companies regarding the prices health plans will pay for medications and determine the out-of-pocket expenses that patients must bear.
The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control nearly 80% of all prescriptions filled in the country.
The committee discovered that these PBMs often compile lists of preferred drugs, favoring more expensive brand-name medications over affordable alternatives. For instance, the report references internal communications from Cigna that discouraged the use of lower-priced options for Humira, a drug for arthritis and other autoimmune disorders that costs around $90,000 annually, while at least one biosimilar is available for half the price.
Additionally, the committee found that Express Scripts misinformed patients about their prescription costs, indicating that they would incur higher expenses by filling their prescriptions at local pharmacies compared to ordering a three-month supply from their mail-order service. This practice restricts patient choice regarding pharmacy selection.
In a related report, the U.S. Federal Trade Commission disclosed similar concerns, noting that increased consolidation has allowed the six largest PBMs to oversee almost 95% of all prescriptions dispensed in the U.S. The FTC highlighted the troubling implications, stating that leading PBMs exert considerable influence over Americans’ access to and affordability of their medications. The situation fosters an environment where vertically integrated PBMs may prefer their own services, which poses conflicts of interest that could harm independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan remarked that these findings suggest that intermediary entities are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for them.