A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward pricier medications while restricting their choice of pharmacies. This report, reviewed by the Wall Street Journal, follows a 32-month investigation in anticipation of a hearing involving top executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients. The three biggest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle approximately 80% of prescriptions.
According to the committee’s findings, PBMs have developed preferred drug lists that favor higher-cost brand-name medications instead of more affordable options. The report references emails from Cigna staff that discouraged the use of cheaper alternatives to Humira, an arthritis treatment costing $90,000 annually, while a biosimilar option was available for about half that price.
Moreover, the committee discovered that Express Scripts informed patients that they would incur higher costs by filling prescriptions at their local pharmacies compared to ordering a three-month supply from its affiliated mail-order service, effectively limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report indicating that the largest six PBMs now manage nearly 95% of all U.S. prescriptions due to increasing vertical integration and market concentration. The FTC highlighted concerns about the significant influence these leading PBMs have on Americans’ access to affordable medications, indicating that the system allows them to favor their own businesses, potentially disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan stated that these middlemen are reportedly overcharging patients for cancer medications, generating over $1 billion in excess revenue.