Pharmacy benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy options, as highlighted in a recent report from the House Committee on Oversight and Accountability.
This report, which has been shared with the Wall Street Journal, comes after a 32-month investigation conducted by the committee, in preparation for an upcoming hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers. They negotiate pricing with pharmaceutical companies and determine out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—manage around 80% of prescriptions.
Findings in the committee’s report reveal that PBMs have crafted lists of preferred medications that frequently include pricier brand-name drugs rather than more affordable alternatives. For instance, the report references communications from Cigna discouraging the use of cheaper alternatives to Humira, a medication for arthritis and other autoimmune conditions that costs approximately $90,000 annually, when a biosimilar option was available at half the price.
The report also indicated 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 affiliated mail-order service. This practice limits patients’ choices in selecting their preferred pharmacy.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report stating that the increasing consolidation among PBMs has allowed the six largest managers to oversee nearly 95% of all prescriptions filled in the U.S.
The FTC expressed concern regarding the implications of these findings, noting that dominant PBMs hold significant influence over Americans’ access to affordable prescription medications. This situation fosters a system where vertically integrated PBMs might favor their owned brands, potentially disadvantaging independent pharmacies and driving up drug costs for consumers.
FTC Chair Lina M. Khan remarked that the findings indicate that these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue for the PBMs.