A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients to more expensive medications and restricting their pharmacy options. This report, highlighted by the Wall Street Journal, comes after a 32-month investigation and precedes a hearing featuring top executives from the largest PBMs in the country.
PBMs act as intermediaries for prescription drug plans provided by health insurers. They negotiate pricing with pharmaceutical companies and determine out-of-pocket costs for patients. The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—control around 80% of prescriptions in the U.S.
The committee’s findings indicate that PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna employees discouraged the use of lower-cost substitutes for Humira, a treatment for arthritis and other autoimmune conditions that at the time cost roughly $90,000 annually, while at least one biosimilar was available for half that price.
Moreover, the report revealed that Express Scripts informed patients they would incur greater expenses by filling prescriptions at local pharmacies compared to obtaining a three-month supply through their mail-order service. This practice reportedly limits patients’ choices in selecting their pharmacy.
Adding to the scrutiny, the U.S. Federal Trade Commission (FTC) released a report earlier this month stating that increased vertical integration has allowed the six largest PBMs to oversee nearly 95% of prescriptions filled in the U.S. The FTC expressed concern that the leading PBMs hold excessive power over Americans’ access to and affordability of prescription drugs. It warned that the current system could lead to conflicts of interest where PBMs may favor their own affiliated businesses, to the detriment of independent pharmacies and to the potential increase in drug costs.
FTC Chair Lina M. Khan noted that these findings highlight how these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue for themselves.