Pharmacy-benefit managers (PBMs) are directing patients toward pricier medications and restricting their pharmacy options, according to a recent report from the House Committee on Oversight and Accountability.
In a significant business move, the candy manufacturer Mars is set to acquire Kellanova, the company behind Pop-Tarts, marking one of the year’s largest transactions.
The report, reviewed by the Wall Street Journal, comes after a 32-month investigation by the committee, which precedes a hearing involving executives from some of the largest PBMs in the country.
PBMs act as intermediaries for health insurers, managing prescription drug plans by negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—control around 80% of U.S. prescriptions.
According to the committee’s findings, PBMs have developed lists of preferred medications that favor higher-priced brand-name drugs over more affordable alternatives. An example highlighted in the report involves emails from Cigna discouraging the use of cheaper substitutes for Humira, a medication for arthritis and other autoimmune conditions, which costs around $90,000 annually, despite the availability of a biosimilar at half that cost.
Furthermore, the committee discovered that Express Scripts informed patients that filling a prescription at their local pharmacy would be more expensive than obtaining a three-month supply through their affiliated mail-order service. This practice was seen as a limitation to patient choice regarding pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that increasing consolidation among PBMs has led these six largest firms to manage nearly 95% of all prescriptions filled in the United States.
The results of the investigation are concerning. The FTC indicated that dominant PBMs possess substantial influence over Americans’ access to and affordability of prescription medications. Moreover, the system encourages vertically integrated PBMs to favor their own affiliated businesses, potentially disadvantaging independent pharmacies and driving up drug costs.
According to FTC Chair Lina M. Khan, the findings reveal that these intermediaries are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for themselves.