Pharmacy-benefit managers (PBMs) are reportedly guiding patients towards more expensive medications while restricting their options for obtaining them, according to a recent report from the House Committee on Oversight and Accountability.
This report, which was reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee in preparation for a hearing involving executives from the largest PBMs in the nation.
PBMs function as third-party administrators managing prescription drug plans for health insurers. They negotiate with drug manufacturers regarding the prices that health plans will pay for medications and also establish the out-of-pocket costs that patients must bear.
The three dominant PBMs in the United States—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (a division of CVS Health)—handle about 80% of all U.S. prescriptions.
Findings from the committee’s report indicate that PBMs are maintaining lists of preferred medications that largely highlight higher-priced brand-name drugs at the expense of less expensive alternatives. For instance, the report mentions communication from Cigna staff suggesting that patients avoid cheaper substitutes for Humira, a medication for arthritis and other autoimmune diseases, which was priced at $90,000 annually, despite the availability of a biosimilar that cost half as much.
The report also noted that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacy compared to obtaining a three-month supply from its affiliated mail-order pharmacy. This practice has limited patients’ choice of where to get their medications.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increased vertical integration and concentration have allowed the six largest PBMs to oversee nearly 95% of prescriptions filled in the U.S.
The FTC expressed concern regarding these findings, highlighting that the leading PBMs wield considerable power that affects Americans’ access to and affordability of prescription drugs. This situation creates a framework where vertically integrated PBMs might prioritize their affiliated enterprises, resulting in conflicts of interest that could disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan remarked that the findings reveal how middlemen are “overcharging patients for cancer drugs,” generating additional revenue exceeding $1 billion.