PBMs Under Fire: Are Patients Paying the Price for Costly Medications?

Pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their options for obtaining these drugs, according to a recent report from the House Committee on Oversight and Accountability.

The report, reviewed by the Wall Street Journal, is the culmination of a 32-month investigation by the committee ahead of a hearing featuring executives from the nation’s largest PBMs.

PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate pricing with pharmaceutical firms and also determine patients’ out-of-pocket expenses for medications.

Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health, the three largest PBMs in the U.S., collectively oversee around 80% of prescriptions.

The committee’s findings indicate that PBMs have developed lists of preferred medications that prioritize higher-priced brand-name drugs over more affordable options. For instance, the report highlights communications from Cigna staff that advised against opting for cheaper alternatives to Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar at roughly half that cost.

Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, thus restricting patients’ pharmacy choices.

A similar report released by the U.S. Federal Trade Commission (FTC) earlier this month noted that the six largest PBMs control nearly 95% of all prescriptions filled in the U.S.

The findings raised serious concerns, with the FTC stating, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” They also pointed to a system where vertically integrated PBMs might favor their own businesses, creating potential conflicts of interest that could harm independent pharmacies and raise drug prices.

FTC Chair Lina M. Khan emphasized that the report’s findings indicate these intermediaries are “overcharging patients for cancer drugs,” resulting in additional revenues exceeding $1 billion.

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