Pharmacy-benefit managers (PBMs) are directing patients towards higher-cost medications and restricting their pharmacy options, according to a recent report by the House Committee on Oversight and Accountability.
The report follows a 32-month investigation by the committee ahead of a hearing involving executives from the largest PBMs in the nation, as reported by the Wall Street Journal.
PBMs serve as third-party administrators for prescription drug plans, negotiating prices between health insurers and pharmaceutical companies and determining patient out-of-pocket costs.
The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescriptions filled in the U.S.
The committee’s findings indicated that PBMs have established preferred drug lists that favor more expensive brand-name medications over less costly alternatives. For instance, internal communications from Cigna discouraged the use of cheaper substitutes for Humira, a drug for arthritis and autoimmune conditions that was priced at $90,000 annually, despite a biosimilar available at half that cost.
Moreover, the investigation revealed that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to purchasing a three-month supply from its mail-order service. This practice limits patients’ options for choosing their pharmacy.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that “increasing vertical integration and concentration” has allowed the six largest PBMs to manage nearly 95% of all prescriptions filled in the U.S.
The findings raise concerns, as the FTC stated that leading PBMs hold considerable power over Americans’ access to affordable medications. The report indicated that vertically integrated PBMs may have the ability and motivation to favor their own related businesses, potentially putting unaffiliated pharmacies at a disadvantage and raising prescription drug costs.
FTC Chair Lina M. Khan highlighted that these middlemen have been “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.