A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are leading patients towards more costly medications while restricting their pharmacy options. This report, which has been reviewed by the Wall Street Journal, comes after a 32-month investigation in advance of a hearing featuring executives from the major PBM companies.
PBMs act as intermediaries in prescription drug plans for health insurers, negotiating prices between pharmaceutical firms and determining patient out-of-pocket expenses. The largest PBMs, including Express Scripts, OptumRx (a part of UnitedHealth Group), and Caremark (operated by CVS Health), control about 80% of U.S. prescriptions.
According to the committee’s findings, these managers often create lists of preferred medications that favor higher-priced brand-name drugs over more affordable alternatives. An example cited in the report involves emails from Cigna discouraging the use of less expensive substitutes for Humira, a drug for arthritis and other autoimmune conditions costing approximately $90,000 annually, while a biosimilar was available for about half that price.
Additionally, the report indicates that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its mail-order service, which limited patients’ choices.
Earlier this month, the U.S. Federal Trade Commission also released a report highlighting similar issues, stating that increased vertical integration has allowed the six largest PBMs to oversee nearly 95% of prescriptions filled in the U.S. The FTC noted that these leading PBMs wield considerable influence over Americans’ access to affordable medications, fostering a system where they might prioritize their own affiliated businesses and thereby create conflicts of interest that compromise independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan emphasized that these findings indicate that these intermediaries are “overcharging patients for cancer drugs,” resulting in an excess revenue stream of over $1 billion.