A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards costlier medications while restricting their pharmacy options. This report, which followed a 32-month investigation, was reviewed by the Wall Street Journal ahead of an upcoming hearing involving executives from the largest PBMs in the nation.
PBMs act as intermediaries managing prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining 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 prescriptions.
The committee’s findings indicate that these PBMs maintain lists of preferred medications that predominantly feature higher-priced brand-name drugs over more affordable alternatives. For instance, the report highlights internal communications from Cigna that discouraged prescribing less expensive alternatives to Humira, a medication for arthritis and autoimmune disorders costing approximately $90,000 annually, despite the availability of a biosimilar for half that price.
Moreover, the committee noted that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to receiving a three-month supply from its associated mail-order service. This practice limits patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that heightened vertical integration among PBMs has allowed the six largest firms to manage nearly 95% of all prescriptions in the country. The FTC’s report expressed concern over the significant control PBMs hold over Americans’ access to affordable medications, suggesting that the current system fosters conflicts of interest. These conflicts may favor PBMs’ affiliated businesses, potentially disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan emphasized that the findings indicate patients are being overcharged for cancer drugs, leading to an additional revenue stream of over $1 billion for the middlemen involved.