A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their options for where to obtain them. The findings emerged from a 32-month investigation ahead of an upcoming hearing involving top executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket costs. The three largest PBMs in the U.S. — Express Scripts, OptumRx (a part of UnitedHealth Group), and CVS Health’s Caremark — manage about 80% of the nation’s prescriptions.
The committee’s report indicated that PBMs favor more expensive brand-name drugs in their preferred drug lists instead of cheaper alternatives. For instance, it referenced internal communications from Cigna that discouraged the use of more affordable substitutes for Humira, a drug used for arthritis and other autoimmune conditions, which had an annual cost of $90,000, even though a biosimilar option was available for half that price.
Additionally, the report highlighted that Express Scripts informed patients 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 service. This practice limits patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report noting that the leading six PBMs manage nearly 95% of all prescriptions in the U.S., driven by increased vertical integration and concentration in the industry. The FTC expressed concern that these major PBMs hold significant power over patients’ access to and affordability of prescription medications.
Lina M. Khan, the Chair of the FTC, pointed out that the report reveals these intermediaries are overcharging patients for cancer medications, generating an additional revenue of over $1 billion.