A recent report from the House Committee on Oversight and Accountability highlights how pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their pharmacy options. The report, reviewed by the Wall Street Journal, stems from a 32-month investigation and precedes a hearing involving executives from the largest PBMs in the country.
PBMs act as intermediaries handling prescription drug plans for health insurance companies, negotiating prices with pharmaceutical manufacturers and establishing out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—together manage around 80% of all prescriptions in the United States.
According to the findings, PBMs compile preferred drug lists that often prioritize higher-priced branded medications over more affordable generic alternatives. For instance, correspondence from Cigna staff was cited in the report, indicating discouragement of using cheaper substitutes for Humira, an arthritis treatment costing approximately $90,000 annually, while a biosimilar option was available for half that price.
The report also pointed out that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply from their affiliated mail-order service, thereby limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that increased consolidation among PBMs allows the six largest firms to manage nearly 95% of all U.S. prescriptions. The FTC expressed concern over the significant influence PBMs hold over Americans’ access to affordable medications, highlighting the potential conflicts of interest that arise when these firms favor their own subsidiaries.
FTC Chair Lina M. Khan remarked on the serious implications of the findings, accusing PBMs of overcharging patients for cancer drugs and generating over $1 billion in additional revenue as a result.