A recent report from the House Committee on Oversight and Accountability indicates that pharmacy-benefit managers (PBMs) are directing patients toward pricier medications and restricting their options for where to obtain them. This report, which was reviewed by the Wall Street Journal, stems from a 32-month investigation by the committee in anticipation of a hearing involving executives from the biggest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. Their responsibilities include negotiating prices with pharmaceutical companies and determining the out-of-pocket expenses patients must pay.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (a UnitedHealth Group subsidiary), and Caremark (part of CVS Health)—manage roughly 80% of the nation’s prescriptions.
The committee’s findings suggest that PBMs have generated lists of preferred medications that favor higher-priced brand-name drugs over more affordable options. For instance, the report highlights correspondence from Cigna employees who advised against using less expensive alternatives to Humira, a drug for arthritis and other autoimmune conditions that costs approximately $90,000 annually at that point, despite at least one biosimilar being available for around half that price.
Moreover, the investigation revealed that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies compared to ordering a three-month supply from its affiliated mail-order service. This practice appears to restrict patients’ choices regarding which pharmacy they could utilize.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that “increasing vertical integration and concentration” has allowed the six largest PBMs to control nearly 95% of all prescriptions dispensed in the United States.
The FTC’s report raised significant concerns, stating that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” It also indicated that this consolidation creates a scenario in which “vertically integrated PBMs seem to favor their own affiliated businesses, presenting conflicts of interest that could negatively impact independent pharmacies and inflate drug prices.”
FTC Chair Lina M. Khan commented that these findings reveal how these intermediaries are “overcharging patients for cancer drugs,” resulting in additional revenues exceeding $1 billion.