Pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting access to certain pharmacies, according to a new report from the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, stems from a 32-month investigation by the committee in preparation for a hearing that will feature executives from the largest PBMs in the nation.
PBMs act as third-party administrators of prescription drug plans for health insurers, negotiating prices with pharmaceutical companies over what health plans will pay for medications. They also determine patients’ out-of-pocket expenses.
The three dominant PBMs in the U.S.—Express Scripts, OptumRx (a subsidiary of UnitedHealth Group), and Caremark (part of CVS Health)—control about 80% of prescriptions filled in the country.
According to the report, PBMs have developed lists of preferred medications that prioritize higher-priced brand-name drugs over cheaper alternatives. For instance, the report highlights emails from Cigna staff that discouraged the use of lower-cost alternatives to Humira, a medication for arthritis and other autoimmune diseases that was priced at $90,000 annually at the time. A biosimilar was available for approximately half that cost.
The committee also noted that Express Scripts informed patients they would incur higher costs if they filled prescriptions at their local pharmacies compared to obtaining a three-month supply through the company’s affiliated mail-order pharmacy. This practice was said to restrict patients’ choices regarding which pharmacy to utilize.
Earlier this month, the U.S. Federal Trade Commission released a similar report, revealing that the six largest PBMs now manage nearly 95% of all prescriptions in the United States due to increasing vertical integration and market concentration.
The findings are concerning. The FTC stated, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation creates a framework in which “vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, generating conflicts of interest that can harm unaffiliated pharmacies and escalate prescription drug costs.”
FTC Chair Lina M. Khan remarked that the investigation shows that these intermediaries are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for themselves.