A recent report from the House Committee on Oversight and Accountability highlights troubling practices by pharmacy-benefit managers (PBMs), suggesting they are directing patients toward more costly medications and restricting their access to various pharmacies.
The report, seen by the Wall Street Journal, comes after a 32-month investigation by the committee in anticipation of a hearing involving executives from major PBM firms. PBMs serve as intermediary administrators of prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket costs.
The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of U.S. prescription transactions. The committee found that these organizations have developed preferred drug lists favoring higher-priced brand-name medications over cheaper alternatives.
One example cited in the report includes internal communications from Cigna that discouraged the use of less expensive alternatives to Humira, a drug for arthritis and autoimmune conditions, which was priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Additionally, the committee noted that Express Scripts informed patients they would incur higher expenses for prescriptions filled at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thus limiting patient choice.
A similar report released by the U.S. Federal Trade Commission (FTC) earlier this month indicated that rising vertical integration and concentration within the PBM market has resulted in the six largest firms managing nearly 95% of all prescriptions filled in the U.S.
The findings are concerning, with the FTC stating that leading PBMs wield considerable power over Americans’ access to affordable prescription medications. This situation creates a framework where vertically integrated PBMs may favor their own businesses over unaffiliated pharmacies, potentially driving up drug costs. FTC Chair Lina M. Khan pointed out that these middlemen are reportedly overcharging patients for cancer medications, generating over $1 billion in additional revenue.