Pharmacy-benefit managers (PBMs) are directing patients towards costlier medications while restricting their pharmacy choices, according to a new report by the House Committee on Oversight and Accountability.
This report follows a 32-month investigation conducted by the committee ahead of an upcoming hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans utilized by health insurers, negotiating with pharmaceutical companies to determine the pricing for drugs covered by health plans. They also establish out-of-pocket costs that patients face.
Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark, which are the three largest PBMs in the U.S., manage around 80% of prescriptions in the country.
The committee’s findings indicated that PBMs have devised lists of preferred medications that often favor higher-priced brand-name drugs over more affordable alternatives. An example highlighted in the report involves emails from Cigna staff discouraging the use of cheaper options for Humira, an arthritis and autoimmune disease treatment that costs approximately $90,000 annually, despite a biosimilar available for half that price.
Additionally, the report revealed that Express Scripts informed patients they would incur higher expenses by filling prescriptions at their local pharmacy compared to obtaining a three-month supply from its affiliated mail-order service. This practice limits patients’ pharmacy choices significantly.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, noting that increasing vertical integration and concentration has allowed the six largest PBMs to control nearly 95% of all U.S. prescriptions.
The implications of these findings are concerning. The FTC remarked that the leading PBMs hold considerable power over American access to and affordability of prescription medications. This creates a scenario where “vertically integrated PBMs appear to have the ability and incentive to favor their own affiliated businesses, leading to conflicts of interest that could disadvantage independent pharmacies and inflate prescription drug prices.”
FTC Chair Lina M. Khan stated that the results indicate that middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue for these entities.