A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive drugs while restricting their choices on where to obtain them.
The report, which follows a 32-month investigation and was reviewed by the Wall Street Journal, was released in anticipation of a hearing featuring executives from the largest PBMs in the U.S.
PBMs, which act as third-party administrators for prescription drug plans on behalf of health insurers, negotiate prices with pharmaceutical companies and determine out-of-pocket costs for patients. The three largest PBMs in the country—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—control about 80% of the prescriptions filled in the United States.
Key findings from the report indicate that PBMs often favor higher-priced brand-name medications on their preferred drug lists over more affordable alternatives. One example highlighted in the report is Cigna’s internal communications, which discouraged the use of cheaper alternatives to Humira, a costly treatment for arthritis that was priced at $90,000 annually, while a biosimilar option was available for about half that cost.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies rather than using their affiliated mail-order pharmacy services. This practice limits patients’ choices concerning where they can fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increasing vertical integration among PBMs has led to the six largest managers controlling nearly 95% of U.S. prescriptions. The FTC expressed concern over the significant influence these PBMs have over the accessibility and affordability of medications for Americans. The findings also suggest that the structure incentivizes PBMs to favor their own associated businesses, which can hurt unaffiliated pharmacies and inflate prescription drug prices.
FTC Chair Lina M. Khan noted that these practices are resulting in patients being overcharged for cancer treatments, contributing over $1 billion in additional revenue for PBMs.