Pharmacy benefit managers (PBMs) are reportedly directing patients towards more expensive medications while restricting their options for obtaining these drugs, according to a recent report from the House Committee on Oversight and Accountability.
This investigation, which lasted 32 months and led to a hearing involving executives from the largest PBMs, revealed significant findings detailed in a report seen by the Wall Street Journal.
PBMs act as third-party administrators for prescription drug plans provided by health insurers. They negotiate drug prices with pharmaceutical companies and set the out-of-pocket costs for patients. The three largest PBMs in the U.S. – Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark – are responsible for managing around 80% of the nation’s prescriptions.
The committee’s report highlights that these PBMs have created lists of preferred medications that prioritize more expensive brand-name drugs over cheaper alternatives. For instance, the report references communications from Cigna employees urging against the use of less costly alternatives to Humira, a drug for arthritis and other autoimmune disorders, which had an annual cost of $90,000, despite the availability of a biosimilar priced at half that.
Additionally, Express Scripts allegedly informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to ordering a three-month supply through its affiliated mail-order pharmacy, which the committee noted restricted patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report stating that growing vertical integration among PBMs has allowed the six largest firms to manage nearly 95% of all U.S. prescriptions.
The FTC’s findings raise significant concerns about the power PBMs wield over Americans’ access to and affordability of prescription medications. It pointed out that the current system enables these integrated PBMs to favor their own affiliated businesses, potentially harming independent pharmacies and raising drug costs. FTC Chair Lina M. Khan remarked that these middlemen are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue.