Pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their access to certain pharmacies, according to a recent report from the House Committee on Oversight and Accountability.
The report, which was examined by the Wall Street Journal, indicates that Medicare patients could potentially save $1.5 billion on ten specific prescription drugs. This report comes after a 32-month investigation by the committee, which is preparing for a hearing on PBMs featuring executives from the largest management companies in the country.
PBMs act as third-party coordinators of prescription drug plans for health insurers, negotiating prices with pharmaceutical manufacturers on behalf of health plans. They are also responsible for determining the out-of-pocket costs that patients must pay.
Currently, the three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage about 80% of prescriptions filled in the United States.
According to the committee’s findings, PBMs have created preferred drug lists that often favor more expensive brand-name medications over cheaper alternatives. For instance, the report highlighted communications from Cigna staff that discouraged the use of lower-cost alternatives to Humira, which, at the time, had an annual cost of $90,000, despite the availability of a biosimilar at half that price.
The report further revealed that Express Scripts informed patients that filling a prescription at a local pharmacy would cost them more than obtaining a three-month supply through their affiliated mail-order pharmacy, effectively limiting patients’ pharmacy options.
Additionally, the U.S. Federal Trade Commission (FTC) published a related report earlier this month, stating that the consolidation in the PBM market allows the six largest PBMs to control nearly 95% of all U.S. prescriptions. The FTC expressed concern that these powerful PBMs may hinder patients’ access to affordable medications. They pointed out that the increasing vertical integration creates potential conflicts of interest, as PBMs might prioritize their own affiliated businesses over unaffiliated pharmacies, thus raising prescription drug costs.
FTC Chair Lina M. Khan noted that these findings emphasize how PBMs are “overcharging patients for cancer drugs,” leading to more than $1 billion in additional revenue for these intermediaries.