Pharmacy benefit managers (PBMs) are directing patients towards pricier 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 preceding a hearing focused on PBMs, featuring top executives from the country’s major management firms.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate with drug manufacturers over the prices that health plans will pay for medications and determine out-of-pocket costs for patients.
The three largest PBMs in the United States—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—handle approximately 80% of all prescriptions in the country.
The committee discovered that PBMs have prioritized lists of preferred medications that often include higher-priced brand-name drugs rather than cheaper generic alternatives. For instance, the report highlights internal communications from Cigna that advised staff against suggesting less expensive substitutes for Humira, a treatment for arthritis and other autoimmune disorders that costs $90,000 annually, even though a biosimilar was available for half that price.
Additionally, the committee found evidence that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This strategy effectively limited patient options regarding pharmacy choice.
A recent report from the U.S. Federal Trade Commission (FTC) echoed these concerns, stating that increased vertical integration among PBMs has allowed the six largest firms to handle nearly 95% of all U.S. prescriptions filled.
The implications of these findings are alarming. The FTC asserted that leading PBMs now hold considerable influence over the accessibility and affordability of prescription medications for Americans. It further noted that this situation breeds a conflict of interest, as vertically integrated PBMs may favor their own affiliated businesses, disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan emphasized that the evidence reveals these intermediaries are “overcharging patients for cancer drugs,” generating an additional revenue stream exceeding $1 billion.