A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy options. This report emerged following a 32-month investigation prior to a hearing involving top executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans and negotiate prices with pharmaceutical companies on behalf of health insurers. They also determine patients’ out-of-pocket expenses. The three largest PBMs in the U.S. – Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark – manage around 80% of all prescriptions filled in the country.
The committee discovered that PBMs compile lists of preferred medications that prioritize higher-cost brand-name drugs over more affordable alternatives. For instance, emails from Cigna employees highlighted discouragement against opting for cheaper alternatives to Humira, a medication for arthritis and autoimmune conditions that was priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Furthermore, the committee found evidence that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to receiving a three-month supply through its affiliated mail-order service, consequently limiting patient choice.
The U.S. Federal Trade Commission (FTC) recently published a related report indicating that the concentration of power among the top six PBMs allows them to manage nearly 95% of all prescriptions. The FTC expressed concern over the substantial influence that these leading PBMs have over Americans’ access to affordable medications, suggesting that their business practices could disadvantage unaffiliated pharmacies and raise prescription drug prices.
FTC Chair Lina M. Khan highlighted the alarming findings, stating that patients are being overcharged for cancer treatments, resulting in excess revenues exceeding $1 billion for these intermediaries.