A recent report from the House Committee on Oversight and Accountability highlights that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy options. The investigation, which lasted 32 months, precedes an upcoming hearing involving executives from the country’s major PBMs.
PBMs function as third-party administrators for prescription drug plans on behalf of health insurers, negotiating prices with pharmaceutical companies and determining patients’ 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.
According to the committee’s findings, the PBMs have been favoring higher-priced brand-name medications over more affordable alternatives in their preferred drug lists. For instance, the report references communications from Cigna that discouraged the use of lower-cost substitutes for Humira, a medication for arthritis and other autoimmune disorders, which was priced at $90,000 annually, despite a biosimilar being available for half that amount.
The investigation also revealed that Express Scripts misled patients by suggesting they would face higher costs at local pharmacies compared to their mail-order services, effectively limiting patients’ pharmacy choices.
In a related development, the U.S. Federal Trade Commission (FTC) released an interim report indicating that six major PBMs now handle nearly 95% of all prescriptions in the country due to increased vertical integration. This concentration gives PBMs significant influence over the affordability and accessibility of prescription drugs.
The FTC expressed concern that these leading PBMs not only have the power to affect drug access for Americans but also pose conflicts of interest by favoring their affiliated businesses. FTC Chair Lina M. Khan stated that the findings reveal how PBMs are “overcharging patients for cancer drugs,” generating an excess of over $1 billion in revenue for themselves.