A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting their pharmacy options. This investigation, which lasted 32 months, concluded just before a hearing involving executives from the largest PBMs in the country.
PBMs act as third-party administrators for prescription drug plans provided by health insurers. They negotiate prices with pharmaceutical firms and determine out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—handle about 80% of all prescriptions.
The committee’s findings indicate that PBMs favor higher-priced brand name drugs on their preferred drug lists, often sidelining more affordable alternatives. For instance, the report highlights internal communications from Cigna that discouraged the use of cheaper substitutes for Humira, an arthritis treatment costing $90,000 annually, while a biosimilar option was available for half that price.
Moreover, the committee noted that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thus limiting patient pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, emphasizing that increased consolidation among PBMs has enabled the six largest companies to manage nearly 95% of U.S. prescriptions. The FTC expressed concerns about the significant power these PBMs wield over patients’ access to affordable medications, suggesting they may favor their affiliated businesses over independent pharmacies, ultimately raising drug costs. FTC Chair Lina M. Khan pointed out that these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.