A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy options. This report, which comes after a 32-month investigation, is set to be discussed in an upcoming hearing featuring executives from the largest PBMs in the country.
PBMs, which serve as third-party administrators for prescription drug plans offered by health insurers, negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket costs. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—manage around 80% of prescriptions.
The report highlights that PBMs have established preferred drug lists that prioritize more costly brand-name medications over more affordable alternatives. For instance, the report mentions internal communications from Cigna discouraging the use of cheaper options for Humira, a drug for arthritis and other autoimmune conditions that costs approximately $90,000 annually, despite the availability of biosimilars at half that price.
Additionally, the investigation found that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply from their affiliated mail-order service. This practice limits patients’ choices regarding where to fill their prescriptions.
This report coincides with findings from the U.S. Federal Trade Commission (FTC), which released a similar report earlier this month. The FTC noted that due to increased vertical integration and market concentration, the six largest PBMs now handle nearly 95% of all prescriptions in the United States.
The findings raise significant concerns, as the FTC stated that these dominant PBMs wield considerable influence over Americans’ access to affordable medications. The report suggests that these PBMs may prioritize their affiliated businesses, leading to potential conflicts of interest that disadvantage independent pharmacies and inflate drug costs for consumers. FTC Chair Lina M. Khan indicated that these middlemen are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for themselves.