A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their pharmacy options. The report, which was reviewed by the Wall Street Journal, comes after a 32-month investigation ahead of a committee hearing involving leaders from the largest PBMs in the country.
PBMs act as third-party administrators for prescription drug plans offered by health insurers, negotiating drug prices with pharmaceutical companies and establishing out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of all prescriptions.
The committee’s findings indicate that PBMs have established preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, the report cites communications from Cigna staff that discouraged the use of less expensive alternatives to Humira, a treatment for arthritis and autoimmune disorders with annual costs reaching $90,000, despite the availability of a biosimilar at half that price.
Additionally, the report highlights that Express Scripts informed patients they would incur higher costs filling prescriptions at local pharmacies compared to obtaining a three-month supply through its associated mail-order service, thus restricting patient choice in selecting pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that increased vertical integration allows the six largest PBMs to oversee nearly 95% of prescriptions in the country. The FTC expressed concern over the considerable power PBMs wield over Americans’ access to affordable prescription drugs, suggesting that this structure may lead to conflicts of interest and inflated drug prices.
FTC Chair Lina M. Khan noted that the findings suggest PBMs are charging patients excessive prices for cancer medications, resulting in over $1 billion in additional revenue for these intermediaries.