According to a recent report from the House Committee on Oversight and Accountability, pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their choice of pharmacies.
A detailed investigation lasting 32 months revealed that Medicare patients could potentially save $1.5 billion on ten specific prescription drugs. Following the investigation, the committee will hold a hearing featuring executives from the country’s largest PBMs.
PBMs, which serve as intermediaries for prescription drug plans on behalf of health insurers, negotiate prices with pharmaceutical companies and determine the out-of-pocket costs for patients. Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark collectively manage around 80% of all prescriptions in the United States.
The report indicated that PBMs have established lists of preferred medications that tend to favor higher-priced brand-name drugs over more affordable alternatives. For instance, communications from Cigna staff were highlighted in the report, which discouraged the use of low-cost substitutes for Humira, a drug used to treat arthritis and other autoimmune disorders costing $90,000 annually, even though a biosimilar was available at half that price.
Furthermore, the committee found that Express Scripts advised patients that they would incur higher costs if they filled prescriptions at their local pharmacies compared to obtaining a three-month supply from their affiliated mail-order pharmacy, curbing patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report echoing similar concerns, indicating that increased consolidation among PBMs has allowed the six largest managers to control nearly 95% of all prescriptions filled in the country.
The FTC’s findings raise alarms, suggesting that leading PBMs have gained significant influence over Americans’ access to affordable prescription drugs. This situation fosters a system where vertically integrated PBMs may prioritize their own affiliated businesses, resulting in conflicts of interest that disadvantage independent pharmacies and elevate drug costs. FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.