According to a recent report by the House Committee on Oversight and Accountability, pharmacy-benefit managers (PBMs) are guiding patients towards more expensive medications while limiting their pharmacy options. This report followed a 32-month investigation and was highlighted ahead of a hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate drug pricing with pharmaceutical companies and determine patient out-of-pocket costs. The three major PBMs—Express Scripts, OptumRx (a part of UnitedHealth Group), and Caremark (part of CVS Health)—manage around 80% of prescriptions filled in the U.S.
The committee’s findings indicate that PBMs often create preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna were cited, which discouraged the use of cheaper options for Humira, a medication for arthritis and autoimmune conditions that had a yearly cost of $90,000, despite a biosimilar being available for half that price.
Additionally, the committee revealed that Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its associated mail-order pharmacy. This practice limits patient choice in selecting their pharmacies.
Earlier this month, the Federal Trade Commission (FTC) released a similar report, indicating that the increased consolidation within the industry has allowed the six largest PBMs to oversee nearly 95% of all prescriptions in the U.S. The FTC expressed concern regarding the significant influence these PBMs hold over Americans’ access to affordable prescription drugs and noted that their vertical integration creates conflicts of interest which can harm independent pharmacies and inflate drug prices.
FTC Chair Lina M. Khan stated that these findings reveal that middlemen in the pharmaceutical industry are “overcharging patients for cancer drugs,” resulting in over $1 billion in excess revenue.