Pharmacy-benefit managers (PBMs) are reportedly directing patients towards more costly medications and restricting their pharmacy options, according to a recent report from the House Committee on Oversight and Accountability.
The committee’s report, which was reviewed by the Wall Street Journal, comes after a 32-month investigation leading up to a hearing featuring executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate pricing with pharmaceutical companies regarding what health plans will pay for medications and also determine the out-of-pocket expenses for patients.
The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—oversee nearly 80% of prescriptions filled in the country.
The investigation highlighted that PBMs have established preferred drug lists that often include higher-priced brand-name medications rather than more affordable alternatives. An example cited in the report involves emails from Cigna employees that discouraged the use of cheaper substitutes for Humira, a treatment for arthritis and other autoimmune diseases, which had an annual cost of $90,000, despite the availability of biosimilars at approximately half that price.
Furthermore, the committee discovered that Express Scripts informed patients that they would incur higher costs if they chose to fill prescriptions at their local pharmacy, compared to ordering a three-month supply through its mail-order service. This practice limits patients’ choices regarding where they can obtain their medications.
Earlier this month, the U.S. Federal Trade Commission released a similar report highlighting the significant market concentration among the largest PBMs, which they said manage nearly 95% of all prescriptions dispensed in the United States.
The findings from both reports raised serious concerns. The FTC noted the dominant PBMs wield considerable influence over Americans’ access to affordable prescription medications. The report indicated that the structure may lead to conflicts of interest, with integrated PBMs favoring their own affiliated businesses, potentially harming unaffiliated pharmacies and driving up drug costs.
FTC Chair Lina M. Khan pointed out that these intermediaries are “overcharging patients for cancer drugs,” which reportedly generates over $1 billion in additional revenue for them.