Pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their options for obtaining them, according to a recent report from the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee. It comes ahead of a hearing featuring executives from the largest PBMs in the nation.
PBMs act as intermediaries that administer prescription drug plans for health insurers. They negotiate prices with pharmaceutical companies for how much health plans will compensate for medications, as well as determining the out-of-pocket expenses patients face.
The three largest PBMs in the U.S., Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark, manage approximately 80% of prescriptions filled in the country.
The committee’s findings indicate that PBMs have established preferred drug lists that favor more expensive brand-name medications while sidelining cheaper alternatives. For instance, the report references internal communications from Cigna that urged against using more affordable substitutes for Humira, a medication for arthritis and other autoimmune disorders that cost about $90,000 annually. At least one biosimilar option was available for half that price.
Additionally, the report revealed that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice restricts patients’ choices regarding where they can fill their prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that “increasing vertical integration and concentration” has allowed the six largest PBMs to oversee nearly 95% of all prescriptions in the U.S.
These findings are concerning, the FTC noted, as “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation leads to a system where “vertically integrated PBMs seem to prefer their own affiliated businesses, resulting in conflicts of interest that can harm independent pharmacies and escalate prescription drug pricing.”
FTC Chair Lina M. Khan emphasized that these middlemen are “overcharging patients for cancer drugs,” yielding them more than $1 billion in extra revenue.