Pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting their options for pharmacies, according to a recent report from the House Committee on Oversight and Accountability.
The report, reviewed by the Wall Street Journal, is a culmination of a 32-month investigation by the committee prior to a hearing that featured executives from the largest PBMs in the nation.
PBMs serve as third-party administrators for prescription drug plans associated with health insurers. They negotiate with drug manufacturers regarding the pricing of medications that health plans will cover while also determining the out-of-pocket costs for patients.
The three largest PBMs in the United States—Express Scripts, OptumRx (a division of UnitedHealth Group), and Caremark (part of CVS Health)—collectively manage around 80% of prescriptions filled across the country.
According to the committee’s report, these PBMs have established lists of preferred medications that tend to favor higher-priced brand-name drugs over cheaper alternatives. For instance, the report highlighted correspondence from Cigna staff that discouraged the use of affordable substitutes for Humira, a treatment for arthritis and other autoimmune diseases, which cost approximately $90,000 annually at the time, despite the availability of a biosimilar at half the cost.
Moreover, the committee discovered that Express Scripts informed patients that they would incur higher costs by obtaining prescriptions from their local pharmacies compared to purchasing a three-month supply through its affiliated mail-order pharmacy. This practice effectively limited patients’ pharmacy choices.
A similar examination was released by the U.S. Federal Trade Commission (FTC) earlier this month. The FTC indicated in its interim findings that increasing concentration and vertical integration has allowed the six largest PBMs to oversee nearly 95% of all prescriptions filled in the United States.
These findings raise significant concerns. The FTC stated, “The leading PBMs now wield considerable power over Americans’ access to and affordability of prescription medications.” Additionally, this creates a scenario where “vertically integrated PBMs seem to possess both the capability and motivation to favor their own affiliated entities, leading to conflicts of interest that could harm independent pharmacies and elevate drug costs.”
FTC Chair Lina M. Khan remarked that the data suggests these intermediaries are “overcharging patients for cancer drugs,” resulting in excess revenue surpassing $1 billion.