A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are guiding patients toward more expensive medications and restricting their pharmacy options. This report, which was reviewed by the Wall Street Journal, comes after a 32-month investigation by the committee preceding a hearing featuring executives from the largest PBMs in the country.
PBMs serve as third-party administrators of prescription drug plans for health insurers, negotiating costs with pharmaceutical companies and setting out-of-pocket expenses for patients. The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions in the country.
The committee’s findings indicate that PBMs have established preferred drug lists that favor higher-priced brand-name drugs over more affordable alternatives. For instance, emails from Cigna employees discouraged the use of less expensive alternatives to Humira, a treatment for arthritis and other autoimmune conditions, which cost approximately $90,000 per year while a biosimilar was available for half that price.
The report also highlighted an instance where Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice restricts patient choice regarding their pharmacy options.
Additionally, earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that the six largest PBMs now manage nearly 95% of all prescriptions in the U.S. The FTC expressed concern about the significant power these PBMs hold over Americans’ access to affordable medications, suggesting that this vertical integration creates conflicts of interest that can disadvantage independent pharmacies and lead to higher drug prices.
FTC Chair Lina M. Khan indicated that these middlemen are “overcharging patients for cancer drugs,” resulting in more than $1 billion in additional revenue for PBMs.