A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their choices of pharmacies. This report follows a 32-month investigation prior to a hearing where executives from the nation’s largest PBMs were present.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies on behalf of health plans and determine out-of-pocket costs for patients. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of the nation’s prescriptions.
According to the committee’s findings, PBMs have developed lists of preferred drugs that prioritize higher-priced brand-name medications over cheaper alternatives. For instance, emails from Cigna staff discouraged the use of less expensive alternatives to Humira, an arthritis treatment with an annual cost of $90,000, despite the availability of a biosimilar for approximately half the price.
The report also highlighted how Express Scripts informed patients that filling prescriptions at local pharmacies would be more expensive than obtaining a three-month supply from their associated mail-order service, consequently limiting patient choice in pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that increased vertical integration among PBMs has led to the six largest firms managing nearly 95% of all prescriptions in the U.S. The FTC expressed concern, stating that these dominant PBMs wield significant influence over Americans’ access to and affordability of prescription medications. This structure creates conflicts of interest, as vertically integrated PBMs may favor their own affiliated businesses, disadvantaging independent pharmacies and driving up drug costs.
FTC Chair Lina M. Khan emphasized that the findings indicate that these intermediaries are overcharging patients for cancer treatments, resulting in an excess revenue stream exceeding $1 billion.