A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their pharmacy options. This report, examined by the Wall Street Journal, comes after a 32-month investigation in anticipation of a hearing featuring executives from the largest PBMs in the nation.
PBMs act as third-party administrators of prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (a CVS Health subsidiary)—control about 80% of U.S. prescriptions.
The report highlights that PBMs have developed preferred drug lists which favor higher-priced brand-name medications instead of more affordable alternatives. Example emails from Cigna staff discouraged the use of cheaper substitutes for Humira, an arthritis treatment costing up to $90,000 annually, despite a biosimilar option available for half that price.
Additionally, the committee found instances where Express Scripts informed patients that filling a prescription at a local pharmacy would be more costly than obtaining a three-month supply through its affiliated mail-order service, thereby limiting patient choices regarding their pharmacy options.
A parallel report from the U.S. Federal Trade Commission (FTC) noted that growing vertical integration in the PBM market allows the six largest companies to manage nearly 95% of all U.S. filled prescriptions. The FTC expressed concern over the significant influence these leading PBMs have on Americans’ access to and costs of prescription drugs, suggesting that vertically integrated PBMs may prioritize their own businesses, leading to conflicts of interest and increased drug prices for consumers.
FTC Chair Lina M. Khan emphasized that these findings indicate that PBMs are overcharging patients for cancer medications, resulting in excess revenue exceeding $1 billion.