A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications and restricting their pharmacy options. This report, reported by the Wall Street Journal, is the result of a 32-month investigation ahead of a hearing featuring executives from the nation’s largest PBM companies.
PBMs serve as third-party administrators for prescription drug plans managed by health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket costs. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle about 80% of the country’s prescriptions.
According to the committee’s findings, PBMs tend to favor higher-priced brand-name drugs over more affordable alternatives in their preferred drug lists. For instance, the report highlights internal Cigna emails that discouraged utilizing cheaper substitutes for Humira, an arthritis treatment with an annual cost of $90,000 at the time, despite the availability of a biosimilar for half that price.
The investigation also uncovered that Express Scripts informed patients they would face higher costs if they opted to fill prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order services, thereby limiting patient pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that increased vertical integration and consolidation have allowed the six largest PBMs to manage nearly 95% of all prescriptions filled in the U.S. The FTC’s findings are concerning, as they highlight that these leading PBMs wield considerable influence over patients’ access to and affordability of their medications. The report indicates that the vertically integrated nature of these firms may lead to conflicts of interest, ultimately disadvantaging non-affiliated pharmacies while driving up drug prices.
FTC Chair Lina M. Khan emphasized that these intermediaries are “overcharging patients for cancer drugs,” generating excess revenue exceeding $1 billion.