A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their pharmacy options.
The investigation, which spanned over 32 months and culminated in a hearing involving executives from the country’s largest PBMs, indicated that Medicare patients could potentially save $1.5 billion on 10 common prescription drugs.
PBMs, acting as intermediaries for prescription drug plans, negotiate prices with drug manufacturers and determine patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (a CVS Health division)—collectively manage about 80% of prescriptions in the United States.
The committee’s findings suggest that PBMs create preferred drug lists that favor higher-priced name-brand medications over less expensive options. One example highlighted in the report involved Cigna employees discouraging the use of cost-effective alternatives to Humira, a treatment for arthritis and other autoimmune diseases, which had a price tag of $90,000 per year despite the availability of a biosimilar at half that cost.
Additionally, the report noted that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service. This practice seemingly limits patients’ choices in selecting pharmacies.
The U.S. Federal Trade Commission (FTC) released a similar report earlier this month, stating that the top six PBMs manage nearly 95% of all filled prescriptions in the country due to increasing consolidation in the industry.
These findings raise concerns about the power the leading PBMs hold over Americans’ access to affordable medications. The FTC highlighted that the current system potentially incentivizes vertically integrated PBMs to favor their own businesses over independent pharmacies, ultimately driving up drug costs for patients. FTC Chair Lina M. Khan emphasized that these intermediaries are effectively overcharging patients for cancer medications, yielding them over $1 billion in additional revenue.