PBMs Under Fire: Are Prescription Prices Being Manipulated?

Pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their access to where they can obtain these drugs, as revealed in a recent report by the House Committee on Oversight and Accountability.

This follows a 32-month investigation that preceded a hearing on PBMs featuring executives from the largest managers in the country. The report, which has been reviewed by the Wall Street Journal, highlights the role of PBMs as third-party administrators of prescription drug plans for health insurers. They are responsible for negotiating prices with pharmaceutical companies and determining the out-of-pocket costs faced by patients.

The three largest PBMs in the United States—Express Scripts, OptumRx (a division of UnitedHealth Group), and Caremark (part of CVS Health)—together manage approximately 80% of all U.S. prescriptions.

According to the committee’s findings, PBMs have established preferred drug lists that prioritize higher-priced brand-name medications over more affordable alternatives. For instance, the report includes emails from Cigna staff advising against the use of cheaper substitutes for Humira, a medication for arthritis and other autoimmune conditions that was priced at $90,000 per year at the time, despite the availability of biosimilars costing around half that amount.

Additionally, the committee noted that Express Scripts informed patients they would incur higher costs if they filled prescriptions at their local pharmacies compared to obtaining a three-month supply through its affiliated mail-order pharmacy. This practice effectively limits patients’ pharmacy options.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, highlighting that the leading six PBMs control nearly 95% of all prescriptions filled in the U.S. The FTC expressed concern over the power these PBMs wield, which can impact Americans’ access to affordable prescription medications. The report points to a system where vertically integrated PBMs might favor their own affiliated businesses, resulting in conflicts of interest that disadvantage independent pharmacies and inflate drug costs.

FTC Chair Lina M. Khan remarked that the findings indicate these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.

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