PBM Practices Under Fire: Are Patients Paying the Price?

A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their choices regarding pharmacies. The report, which caught the attention of the Wall Street Journal, is based on a 32-month investigation and comes ahead of a hearing featuring executives from major PBM companies.

PBMs serve as intermediaries for prescription drug plans on behalf of health insurers, negotiating pricing with pharmaceutical firms and determining patients’ out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—are responsible for managing about 80% of all prescriptions.

The committee’s findings indicate that PBMs often create drug lists favoring higher-priced brand name medications over more affordable options. For instance, the report highlights correspondence from Cigna staff that discouraged opting for cheaper alternatives to Humira, a treatment for arthritis, which at the time had an annual cost of $90,000 while a biosimilar was available for half that price.

Additionally, the investigation revealed that Express Scripts informed patients they would incur higher costs by using local pharmacies instead of obtaining a three-month supply from its associated mail-order pharmacy. This practice effectively restricts patients’ pharmacy choices.

Earlier this month, the Federal Trade Commission (FTC) released a similar report indicating that the top six PBMs manage nearly 95% of all U.S. prescriptions. The FTC’s interim report pointed to concerns regarding the concentration of power among PBMs, suggesting that they can undermine affordable access to medications and harm independent pharmacies while benefiting their own affiliated businesses.

FTC Chair Lina M. Khan emphasized that the findings highlight how PBMs are overcharging patients, particularly for cancer treatments, leading to excess revenue exceeding $1 billion.

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