A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy choices. This finding comes after a 32-month investigation prior to a hearing featuring executives from the country’s largest PBMs.
PBMs serve as intermediaries in prescription drug plans for health insurance providers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for consumers. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of U.S. prescriptions.
According to the report, PBMs have created preferred drug lists that prioritize higher-priced brand-name drugs over more affordable alternatives. An example highlighted in the report includes internal communications from Cigna discouraging the use of lower-cost alternatives to Humira, a costly treatment for arthritis and autoimmune conditions that was priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Moreover, the findings indicate that Express Scripts advised patients that filling a prescription at a local pharmacy would be more expensive than obtaining a three-month supply from its affiliated mail-order service, thereby restricting patients’ options for pharmacy use.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that increasing concentration among PBMs has resulted in the six largest firms handling nearly 95% of all prescriptions in the U.S. The FTC expressed concern, stating that leading PBMs hold significant power over Americans’ access to affordable medications. The report warned that vertically integrated PBMs may favor their affiliated businesses, which can disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan noted that the findings demonstrate that these middlemen are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.