A recent report from the House Committee on Oversight and Accountability claims that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medication while restricting their pharmacy options.
The report, reviewed by the Wall Street Journal, is the result of a 32-month investigation conducted by the committee in preparation for an upcoming hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate drug prices with pharmaceutical companies and set the out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions filled in the United States.
The committee found that PBMs often develop preferred drug lists that favor more expensive brand-name medications over less costly alternatives. For instance, the report mentions internal communications from Cigna discouraging the use of cheaper alternatives to Humira, an arthritis treatment with an annual cost of $90,000, while at least one biosimilar could be obtained for half that price.
Additionally, the committee reported that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies rather than ordering a three-month supply through its affiliated mail-order service, which restricted patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report highlighting that the six biggest PBMs account for nearly 95% of all prescriptions filled in the country. The FTC noted that this consolidation grants substantial power to PBMs, affecting Americans’ access to affordable medications.
According to FTC Chair Lina M. Khan, these middlemen are reportedly overcharging patients for cancer medications, generating over $1 billion in excess revenue.