Pharmacy benefit managers (PBMs) are directing patients towards pricier medications while restricting their pharmacy options, as noted in a recent report by the House Committee on Oversight and Accountability. This report stems from a thorough 32-month investigation leading up to a hearing involving top executives from major PBM firms.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating drug prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—collectively oversee around 80% of prescriptions filled in the country.
According to the report, these PBMs have developed preferred drug lists that favor high-cost brand-name medications over more affordable options. An example highlighted in the report indicates that Cigna staff discouraged utilizing cost-effective alternatives to Humira, a medication for arthritis and other autoimmune disorders priced at $90,000 annually, despite the availability of biosimilars at half that cost.
Moreover, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service, which restricted patients’ pharmacy choices.
Earlier this month, the Federal Trade Commission (FTC) released a similar report noting that the concentration and vertical integration within the industry enable the six largest PBMs to manage nearly 95% of U.S. prescriptions. The FTC expressed concern that this significant control by leading PBMs hinders Americans’ access to and affordability of prescription drugs. The FTC highlighted the risk of conflicts of interest as vertically integrated PBMs may favor their own associated businesses, potentially disadvantaging independent pharmacies and increasing drug prices for consumers.
FTC Chair Lina M. Khan emphasized that the findings reveal these intermediaries are “overcharging patients for cancer drugs,” resulting in excess revenues exceeding $1 billion.