A recent report from the House Committee on Oversight and Accountability claims that pharmacy-benefit managers (PBMs) are pushing patients towards more expensive medications while restricting their pharmacy options.
According to the report, which was seen by the Wall Street Journal, Medicare patients could potentially save $1.5 billion on ten specific prescription drugs. This study was conducted over 32 months and precedes a hearing involving executives from the largest PBMs in the country.
PBMs function as intermediaries that administer prescription drug plans for health insurers. They negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health)—handle about 80% of prescriptions in the country.
The committee’s investigation revealed that PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna indicated discouragement of cheaper substitutes for Humira, a costly treatment for arthritis and autoimmune disorders, which was priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Additionally, the report highlighted practices by Express Scripts, which informed patients that they would likely incur higher costs by filling prescriptions at local pharmacies compared to utilizing its mail-order pharmacy services. This practice limits patients’ choices regarding where to obtain their medications.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, emphasizing that the consolidation among the largest six PBMs allows them to oversee nearly 95% of prescriptions in the U.S. This vertical integration raises concerns, as the FTC noted that it grants these PBMs significant influence over Americans’ access to and affordability of prescription medications.
FTC Chair Lina M. Khan expressed that findings indicate these intermediaries are overcharging patients for cancer medications, resulting in over $1 billion in additional revenue.