A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their choices regarding where to obtain these drugs.
The report, which followed a 32-month investigation and was reviewed by the Wall Street Journal, precedes a hearing involving executives from the largest PBMs in the country. PBMs act as intermediaries, managing prescription drug plans for health insurers. They negotiate with pharmaceutical companies to determine the costs health plans incur for medications and set the out-of-pocket expenses for patients.
The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage about 80% of prescriptions nationwide.
The committee found that PBMs have been prioritizing lists of preferred drugs, favoring higher-priced brand-name medications over cheaper alternatives. An example cited in the report included communications from Cigna discouraging the use of less expensive alternatives to Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar costing half that amount.
Furthermore, Express Scripts informed patients that filling a prescription at a local pharmacy would be more costly than obtaining a three-month supply through its affiliated mail-order pharmacy, thereby restricting patients’ choices in selecting a pharmacy.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that increased vertical integration has allowed the six largest PBMs to manage nearly 95% of all prescriptions filled in the U.S. The FTC highlighted that this concentration gives leading PBMs substantial control over Americans’ access to affordable prescription drugs and suggested that their structure creates conflicts of interest that adversely affect unaffiliated pharmacies and raise drug prices.
According to FTC Chair Lina M. Khan, the findings indicate that these intermediaries are overcharging patients for cancer medications, generating excess revenue exceeding $1 billion.