A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward costlier medications and restricting their choice of pharmacies.
The report, covered by the Wall Street Journal, follows a 32-month inquiry by the committee ahead of an upcoming hearing that will include executives from the largest PBMs in the country.
PBMs serve as intermediaries between health insurers and prescription drug providers. They negotiate pricing with pharmaceutical companies, determine patient out-of-pocket costs, and administer prescription drug plans for insurers.
The three biggest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of all prescriptions filled in the country.
The investigation uncovered that PBMs tend to promote more expensive branded drugs over lower-cost generic alternatives. The report highlights instances where Cigna employees discouraged the use of affordable alternatives to Humira, a high-cost treatment for autoimmune conditions, which was priced at $90,000 annually, despite a biosimilar option being available for roughly half that price.
Additionally, the committee found that Express Scripts informed patients they would incur higher costs by using their local pharmacy compared to obtaining a three-month supply from its affiliated mail-order service. This practice limits patients’ pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, emphasizing that increased consolidation has allowed the six largest PBMs to oversee nearly 95% of prescriptions written in the U.S.
The findings raise significant concerns, with the FTC stating, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This dynamic fosters a situation where vertically integrated PBMs may favor their own affiliated businesses, potentially disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan remarked that the evidence suggests these middlemen are “overcharging patients for cancer drugs,” resulting in an excess revenue of over $1 billion.