Pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their pharmacy options, according to a recent report from the House Committee on Oversight and Accountability.
The report, which has been reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee and precedes a hearing featuring executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans under health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs in the United States—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—control around 80% of the nation’s prescriptions.
The findings reveal that these PBMs have developed preference lists that prioritize higher-priced brand-name drugs over cheaper alternatives. For instance, the report includes emails from Cigna employees that discouraged opting for affordable alternatives to Humira, a medication for arthritis and other autoimmune disorders, which cost $90,000 annually at that time. At least one biosimilar option was available for half that price.
Furthermore, Express Scripts reportedly informed patients that filling prescriptions at local pharmacies would be more expensive than obtaining a three-month supply through its affiliated mail-order service, effectively limiting patients’ choices regarding where they can fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission released a report indicating that “increasing vertical integration and concentration has allowed the six largest PBMs to oversee nearly 95% of all prescriptions filled in the United States.”
The findings are concerning, with the FTC stating, “The leading PBMs now wield considerable power over Americans’ access to and affordability of their prescription drugs.” This situation fosters an environment where vertically integrated PBMs may favor their own businesses, leading to potential conflicts of interest that disadvantage independent pharmacies and escalate prescription costs.
FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.