Pharmacy benefit managers (PBMs) are directing patients towards more costly medications and restricting access to certain pharmacies, a recent report by the House Committee on Oversight and Accountability reveals. This report, as noted by the Wall Street Journal, wraps up a 32-month investigation and comes ahead of a congressional hearing featuring executives from the country’s largest PBMs.
PBMs serve as intermediaries for prescription drug plans provided by health insurers, negotiating prices with pharmaceutical companies and establishing patients’ out-of-pocket expenses. The three largest PBMs in the U.S. – Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark – oversee roughly 80% of prescription medications.
The findings indicate that these PBMs tend to favor higher-priced brand-name drugs in their lists of preferred medications, often overlooking cheaper alternatives. For instance, the report highlights correspondence from Cigna staff that discouraged the use of less expensive substitutes for Humira, a drug priced at $90,000 annually for treating arthritis and other autoimmune diseases, while a biosimilar was available for about half that cost.
Moreover, the committee discovered that Express Scripts informed patients they would incur higher costs if they filled prescriptions at their local pharmacies compared to ordering a three-month supply through its mail-order service. This practice seemingly restricts patient choice regarding their pharmacy options.
A recent report from the U.S. Federal Trade Commission echoed these concerns, stating that a surge in consolidation among PBMs has resulted in the top six managing nearly 95% of all prescriptions in the country. The FTC’s interim findings were alarming; they highlighted the significant power leading PBMs wield over Americans’ access to affordable medications, along with potential conflicts of interest that could arise from their vertical integration.
FTC Chair Lina M. Khan pointed out that these middlemen are reportedly “overcharging patients for cancer drugs,” resulting in an additional revenue of over $1 billion.