Pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their options for obtaining them, as revealed in a recent report from the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, comes after a thorough 32-month investigation conducted by the committee in anticipation of an upcoming hearing that will feature executives from the country’s largest PBMs.
PBMs act as intermediaries for prescription drug plans on behalf of health insurers. They negotiate prices with pharmaceutical companies and also determine 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, collectively manage about 80% of U.S. prescriptions.
The report highlighted that PBMs have developed preferred drug lists that predominantly feature higher-priced brand-name drugs over their cheaper counterparts. For instance, emails from Cigna indicated discouragement of using lower-cost alternatives to Humira, an arthritis medication priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Additionally, the committee noted that Express Scripts informed patients that filling prescriptions at local pharmacies would result in higher costs compared to obtaining a three-month supply through its affiliated mail-order pharmacy, thereby limiting patient choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that the increasing consolidation within the industry has allowed the six largest PBMs to control nearly 95% of all prescriptions processed in the United States.
These findings raise significant concerns. The FTC stated that the dominant PBMs have amassed substantial power over the affordability and accessibility of prescription drugs for Americans. This consolidation creates a situation where vertically integrated PBMs may favor their own businesses, which can lead to increased costs for prescription medications and disadvantages for independent pharmacies.
FTC Chair Lina M. Khan pointed out that these middlemen are “overcharging patients for cancer drugs,” generating an excess revenue of over $1 billion.