Pharmacy benefit managers (PBMs) are reportedly directing patients towards pricier medications while restricting their options for obtaining them, according to a recent report by the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, comes after a comprehensive 32-month investigation ahead of a hearing featuring executives from the country’s leading PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies on behalf of health plans. They also determine out-of-pocket expenses for patients.
The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control nearly 80% of all prescriptions filled.
The committee’s findings reveal that PBMs are curating lists of preferred medications that prioritize more expensive brand-name drugs over cost-effective alternatives. An example cited in the report includes communications from Cigna that discouraged the use of a cheaper alternative to Humira, a treatment for arthritis and other autoimmune conditions, which at the time cost $90,000 annually, while a biosimilar was available for around half that price.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs if they filled prescriptions at their local pharmacies instead of ordering a three-month supply through its affiliated mail-order pharmacy. This practice limited patients’ choices regarding where to fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increased vertical integration and concentration has allowed the six largest PBMs to handle nearly 95% of all prescriptions in the U.S.
The FTC expressed concern over these findings, noting that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” They highlighted that this situation leads to PBMs potentially favoring their own affiliated businesses, creating conflicts of interest that could disadvantage independent pharmacies and raise the costs of prescription medications.
FTC Chair Lina M. Khan stated that the results indicate these intermediaries are “overcharging patients for cancer drugs,” resulting in additional revenue exceeding $1 billion.