A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their pharmacy options. This report was highlighted by the Wall Street Journal following a 32-month investigation prior to an upcoming hearing featuring executives from major PBM firms.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers, negotiating drug prices with pharmaceutical companies, and determining patient out-of-pocket expenses. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—together oversee about 80% of prescriptions filled nationwide.
According to the committee’s findings, PBMs have developed preferred drug lists that favor more expensive branded medications over cost-effective alternatives. For instance, internal communications from Cigna were cited in the report, revealing discouragement against choosing less expensive substitutes for Humira, a drug used to treat arthritis and autoimmune conditions, which at one point was priced at $90,000 annually, while biosimilars were available for half that price.
The investigation also indicated that Express Scripts informed patients that seeking prescriptions from their local pharmacies would result in higher costs compared to receiving a three-month supply via their mail-order service. This approach restricts patients’ choices regarding where they fill their prescriptions.
Additionally, the Federal Trade Commission (FTC) released a similar report earlier this month, stating that the top six PBMs control nearly 95% of prescriptions filled in the U.S. The FTC’s findings are concerning, indicating that dominant PBMs exert considerable influence on Americans’ access to affordable medications. The report also highlighted potential conflicts of interest that arise from PBMs favoring their own affiliated businesses, which can disadvantage independent pharmacies and inflate drug prices. FTC Chair Lina M. Khan noted that these middlemen are reportedly overcharging patients for cancer medications, generating over $1 billion in additional revenue.