Pharmacy-benefit managers (PBMs) are reportedly directing patients towards pricier medications while restricting their access to more affordable options, as outlined in a recent report by the House Committee on Oversight and Accountability.
The report, shared with the Wall Street Journal, followed a 32-month investigation by the committee, which is preparing for a hearing that will feature executives from the nation’s leading PBMs.
PBMs act as third-party administrators for prescription drug plans associated with health insurers. They negotiate pricing with pharmaceutical companies, determining what health plans will reimburse for medications, and set patients’ out-of-pocket expenses.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—control approximately 80% of prescription medications dispensed in the country.
According to the committee’s findings, PBMs have compiled lists of preferred medications that prioritize higher-cost brand names over cheaper generic alternatives. An example in the report mentions internal communications from Cigna which discouraged the use of less expensive alternatives to Humira, a medication for arthritis and other autoimmune diseases that costs around $90,000 annually, despite the availability of a biosimilar for about half that price.
The report further stated that Express Scripts informed patients that they would incur higher costs if they opted to fill a prescription at a local pharmacy compared to obtaining a three-month supply through its affiliated mail-order service, thereby limiting patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report highlighting that increased vertical integration and market concentration have enabled the six largest PBMs to manage nearly 95% of all prescriptions filled in the U.S.
The findings are concerning, with the FTC noting that the major PBMs wield substantial influence over Americans’ access to and affordability of prescription drugs. They pointed out that vertically integrated PBMs seem to have the capacity and incentive to favor their own affiliated businesses, creating conflicts of interest that can disadvantage independent pharmacies while driving up drug costs.
FTC Chair Lina M. Khan stated that the investigation revealed that these middlemen are “overcharging patients for cancer drugs,” resulting in additional revenue of over $1 billion.