A recent report from the House Committee on Oversight and Accountability highlights how pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy choices. This investigation spanned 32 months and was released in anticipation of a hearing featuring executives from the largest PBM firms.
PBMs serve as third-party administrators for prescription drug plans on behalf of health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—oversee about 80% of prescriptions in the United States.
The report indicates that PBMs have prioritized higher-cost brand name drugs on their preferred drug lists instead of more affordable alternatives. It noted that staff at Cigna discouraging the use of cheaper substitutes for Humira, a drug for arthritis and autoimmune conditions priced at $90,000 annually, despite the availability of a biosimilar for half that cost.
Additionally, Express Scripts allegedly informed patients that filling a prescription at local pharmacies would cost more than obtaining a three-month supply from its own mail-order service, thereby limiting patient choices in pharmacy selection.
A concurrent report from the U.S. Federal Trade Commission (FTC) corroborated these findings, noting that increased consolidation has allowed the six largest PBMs to manage nearly 95% of all prescriptions in the U.S. The FTC expressed concern over the significant control these entities have over drug access and affordability for Americans, suggesting that the vertical integration of PBMs may lead to conflicts of interest and elevated prescription costs.
FTC Chair Lina M. Khan emphasized that the evidence reveals how these intermediaries are inflating costs for patients, particularly concerning cancer medications, thereby generating additional revenues exceeding $1 billion.