A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications while restricting their pharmacy options. This finding follows a 32-month investigation by the committee, which preceded a hearing featuring executives from the nation’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies on behalf of health plans and determine out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—account for approximately 80% of prescriptions filled in the U.S.
The committee’s findings indicate that PBMs have created drug formularies that favor expensive brand-name drugs over less costly alternatives. For instance, the report cites internal communications from Cigna that discouraged the use of lower-priced alternatives to Humira, an arthritis treatment that was priced at $90,000 annually when cheaper biosimilars were available at half that cost.
Furthermore, the investigation found that Express Scripts informed patients that filling prescriptions at local pharmacies would be more expensive than obtaining a three-month supply through their mail-order service, thus limiting patients’ choices for pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, which stated that increasing consolidation has allowed the six largest PBMs to manage nearly 95% of prescriptions in the United States. The FTC characterized this situation as troubling, noting that leading PBMs hold considerable power over Americans’ access to affordable medications. It warned that vertically integrated PBMs appear to favor their own affiliated businesses, leading to potential conflicts of interest that could harm independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan emphasized that these middlemen are overcharging patients for cancer medications, generating over $1 billion in additional revenue.