A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their choices in pharmacies. This conclusion follows a 32-month investigation and coincides with an upcoming hearing that will feature executives from major PBMs.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers. They negotiate drug prices with pharmaceutical companies and determine the out-of-pocket costs faced by patients.
The largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—collectively handle about 80% of prescriptions filled across the country.
The committee’s investigation indicates that PBMs often develop lists of preferred medications that prioritize more expensive brand-name drugs over less costly alternatives. For instance, the report mentions internal communications from Cigna that advised against utilizing cheaper substitutes for Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Furthermore, the committee highlighted that Express Scripts informed patients they would incur greater costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its associated mail-order service. This practice restricts patients’ pharmacy options.
In a related note, the U.S. Federal Trade Commission (FTC) released a report earlier this month, indicating that the six largest PBMs now control nearly 95% of all prescriptions filled in the country due to increasing vertical integration.
The FTC expressed concern over the growing power PBMs wield over patients’ access to affordable medications, suggesting that this system fosters conflicts of interest by favoring affiliated businesses and inflating prescription drug prices. FTC Chair Lina M. Khan pointed out that these middlemen are reportedly “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for themselves.