A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their options for obtaining these drugs. This findings come after a lengthy 32-month investigation, which culminated in a hearing involving executives from the largest PBMs in the country.
PBMs are third-party administrators that handle prescription drug plans for health insurers. They negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket expenses. The trio of largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—collectively manage about 80% of the nation’s prescriptions.
According to the report, PBMs maintain lists of preferred drugs that often favor higher-priced brand-name medications over their less expensive alternatives. An instance highlighted in the report involves Cigna communications that discouraged the use of lower-cost alternatives to Humira, an arthritis treatment priced at around $90,000 annually, while a biosimilar option was available for half that cost.
Additionally, the committee found Express Scripts informed patients that filling prescriptions at local pharmacies would be more costly than obtaining a three-month supply from its affiliated mail-order service. This practice effectively restricts patients’ pharmacy choices.
Coinciding with this report, the Federal Trade Commission (FTC) released its own findings indicating that heightened vertical integration among PBMs has allowed the six largest firms to dominate nearly 95% of prescription fills in the U.S. The FTC raised concerns that these PBMs wield substantial influence over patients’ ability to access affordable medications. They highlighted a troubling trend where vertically integrated PBMs may favor their affiliated businesses, potentially disadvantaging independent pharmacies and inflating drug prices.
FTC Chair Lina M. Khan stated that these intermediary companies are “overcharging patients for cancer drugs,” which has augmented their revenue by over $1 billion.