PBMs Under Fire: Are Patients Paying the Price for Prescription Costs?

Pharmacy-benefit managers (PBMs) are directing patients toward more costly medications and restricting their pharmacy options, as outlined in a recent report by the House Committee on Oversight and Accountability.

The House Committee’s investigation, which lasted 32 months, culminated in anticipated hearings involving executives from the largest PBMs in the country. The findings were reported by the Wall Street Journal.

PBMs act as intermediaries between health insurers and prescription drug providers, negotiating prices 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 all prescriptions dispensed in the U.S.

The committee’s report reveals that PBMs have developed preferred drug lists that favor higher-priced brand-name drugs instead of more affordable options. For instance, emails from Cigna staff discouraged using less expensive alternatives for Humira, an arthritis medication costing $90,000 annually, even though a biosimilar was available for around half that price.

Furthermore, the report indicated that Express Scripts informed patients that filling prescriptions at local pharmacies would be more expensive than obtaining a three-month supply through their affiliated mail-order service. This practice effectively limited patients’ pharmacy choices.

Earlier this month, the Federal Trade Commission (FTC) released a matching report, emphasizing that growing consolidation among PBMs enables the six largest to control nearly 95% of U.S. prescriptions. The FTC expressed concern over the significant power PBMs hold over patients’ access to affordable medications, warning that the vertical integration of these organizations could lead to conflicts of interest that disadvantage independent pharmacies.

FTC Chair Lina M. Khan commented on the findings, stating that these middlemen might be overcharging patients for cancer drugs, generating excess revenue surpassing $1 billion.

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