A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting access to certain pharmacies. This report comes after a 32-month investigation and precedes a hearing involving executives from the largest PBMs in the country.
PBMs serve as intermediaries for prescription drug plans on behalf of health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—control around 80% of U.S. prescriptions.
The committee’s report highlights that these PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. An example provided in the report includes internal communications from Cigna, which suggested avoiding cheaper substitutes for Humira, a treatment for arthritis and other autoimmune disorders that was priced at $90,000 annually, while a biosimilar option was available for half that cost.
Moreover, it was found that Express Scripts informed patients they would incur higher costs by using local pharmacies compared to obtaining a three-month supply through its mail-order service, thereby restricting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that the largest six PBMs manage nearly 95% of U.S. prescriptions due to increasing vertical integration and concentration within the market. The FTC’s findings indicate that dominant PBMs wield substantial power over American citizens’ access to and affordability of medications. Additionally, the report suggests that the vertically integrated nature of these PBMs could lead to conflicts of interest, disadvantaging independent pharmacies and driving up drug costs.
FTC Chair Lina M. Khan stated that these findings indicate that PBMs are “overcharging patients for cancer drugs,” leading to excess revenue of over $1 billion for these middlemen.