A recent report by the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards costlier medications and restricting their pharmacy options. This finding follows a 32-month investigation by the committee prior to a hearing involving executives from the nation’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans, negotiating prices between health insurers and pharmaceutical companies while also determining patients’ out-of-pocket costs. The three largest PBMs in the United States—Express Scripts, OptumRx (owned by UnitedHealth Group), and CVS Health’s Caremark—control around 80% of all prescriptions.
The committee’s report indicates that PBMs have prioritized lists of preferred medications that often feature higher-priced brand-name drugs over more affordable alternatives. For instance, emails from Cigna staff reportedly discouraged the use of less expensive substitutes for Humira, a treatment for arthritis that costs around $90,000 annually, despite the availability of a biosimilar priced at half that amount.
Additionally, the report highlighted that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to acquiring a three-month supply from its affiliated mail-order service, thereby limiting patients’ pharmacy choices.
Compounding these issues, the Federal Trade Commission (FTC) recently published a similar report indicating that the six largest PBMs collectively managed nearly 95% of all prescriptions in the U.S. The FTC’s findings are alarming, stating that leading PBMs wield considerable influence over Americans’ access to and affordability of prescription medications. This has led to a scenario where vertically integrated PBMs can favor their own businesses, raising concerns about potential conflicts of interest that might harm independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan pointed out that these middlemen are reportedly “overcharging patients for cancer drugs,” resulting in excess revenues exceeding $1 billion.