A recent report by the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their options for obtaining these drugs. This report, reviewed by the Wall Street Journal, follows a 32-month investigation and precedes a hearing featuring executives from the country’s largest PBM firms.
PBMs serve as intermediaries in prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs—Express Scripts, OptumRx (a subsidiary of UnitedHealth Group), and Caremark (part of CVS Health)—manage nearly 80% of prescriptions in the United States.
The committee’s findings indicate that these PBMs have established preferred drug lists that favor higher-priced brand-name drugs over more affordable alternatives. For instance, emails from Cigna staff discouraged the use of a lower-cost alternative to Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar for half that price.
Additionally, the report highlighted that Express Scripts informed patients they would pay more for prescriptions at local pharmacies than if they opted for a three-month supply from the company’s affiliated mail-order pharmacy, thereby restricting patient choice.
Earlier this month, the U.S. Federal Trade Commission released a similar report, noting that rising vertical integration among PBMs has led to the six largest firms managing approximately 95% of prescriptions in the country. The FTC expressed concern that this consolidation grants significant power to leading PBMs over access to affordable medications, while also creating conflicts of interest that may disadvantage unaffiliated pharmacies.
FTC Chair Lina M. Khan pointed out that these middlemen appear to be overcharging patients for cancer medications, contributing to an over $1 billion spike in revenue for PBMs.