A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards costlier medications and restricting their pharmacy options. This conclusion emerges from a 32-month investigation leading up to a hearing involving top executives from major PBM firms.
PBMs act as intermediaries in prescription drug plans for health insurers, negotiating prices with drug manufacturers and determining the out-of-pocket costs for patients. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—handle about 80% of U.S. prescriptions.
The report indicates that PBMs have compiled lists of preferred drugs that predominantly feature higher-priced brand name medications instead of less expensive alternatives. For instance, it highlights internal communications from Cigna that advised against using cheaper alternatives to Humira, a drug for arthritis and autoimmune conditions costing around $90,000 annually, even though a biosimilar was available at half that price.
Additionally, the committee pointed out that Express Scripts informed patients they would incur greater expenses by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice effectively restricted patients’ choices regarding where they could fill prescriptions.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that the six largest PBMs manage nearly 95% of all prescriptions in the country. The FTC’s findings are concerning, suggesting that dominant PBMs wield significant influence over the affordability and accessibility of prescription medications for Americans. This may foster a system in which these PBMs exhibit a preference for their own associated businesses, risking conflicts of interest that could harm unaffiliated pharmacies and drive up drug prices.
FTC Chair Lina M. Khan noted that the evidence suggests these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.