Pharmacy benefit managers (PBMs) are guiding patients towards pricier medications while restricting their pharmacy choices, according to a recent report from the House Committee on Oversight and Accountability.
This report, highlighted by the Wall Street Journal, follows a 32-month investigation by the committee in anticipation of a hearing that will involve top executives from the major PBM firms. PBMs serve as intermediaries in prescription drug plans for health insurers, negotiating costs with pharmaceutical companies and establishing the out-of-pocket expenses for patients.
The largest PBMs in the U.S., including Express Scripts, OptumRx (a part of UnitedHealth Group), and Caremark (operated by CVS Health), collectively handle about 80% of all prescriptions in the country.
The findings indicate that PBMs have a tendency to favor higher-cost brand-name drugs instead of less expensive alternatives. The report cites internal communications from Cigna that advised against using more affordable substitutes for Humira, an arthritis treatment that was priced at $90,000 annually, even though a biosimilar option was available for half that cost.
Moreover, the committee discovered that Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, which restricts patients’ choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar study stating that the six largest PBMs account for nearly 95% of prescriptions filled in the United States. The FTC expressed concern over the substantial power these PBMs wield over the accessibility and affordability of prescription drugs for Americans.
The FTC’s interim report underscores that the increasing dominance of vertically integrated PBMs can create conflicts of interest, potentially disadvantaging non-affiliated pharmacies and driving up drug prices. Chair Lina M. Khan highlighted that these middlemen, particularly with cancer drugs, are overcharging patients, resulting in excess revenues exceeding $1 billion.