A new report from the House Committee on Oversight and Accountability reveals that pharmacy benefit managers (PBMs) are directing patients towards more expensive medications while restricting their options for obtaining these drugs. The findings are part of a 32-month investigation, as detailed in the report viewed by the Wall Street Journal, in anticipation of a hearing featuring executives from major U.S. PBMs.
PBMs act as intermediaries for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs in the country—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage around 80% of all prescriptions in the U.S.
According to the committee’s report, PBMs have prioritized higher-priced brand-name medications over more affordable alternatives in their preferred drug lists. An example cited involves Cigna employees who advised against using cheaper options for Humira, a costly medication for arthritis and other autoimmune disorders, which at one point had an annual cost of $90,000, while a biosimilar was available for significantly less.
The committee also discovered that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies compared to ordering a three-month supply through its affiliated mail-order service. This practice limits patient choice regarding their pharmacy options.
A similar report released earlier this month by the U.S. Federal Trade Commission (FTC) noted that heightened vertical integration among PBMs has resulted in the six largest PBMs managing nearly 95% of all prescriptions in the United States. The FTC highlighted that this consolidation has granted PBMs substantial power over patients’ access to and affordability of prescription medications. Such a structure raises concerns about conflicts of interest, as PBMs may favor their affiliated businesses, disadvantaging independent pharmacies and potentially raising drug prices for consumers.
FTC Chair Lina M. Khan remarked that the findings indicate these middlemen are “overcharging patients for cancer drugs,” generating an additional revenue of over $1 billion.