Pharmacy-benefit managers (PBMs) are directing patients towards costlier medications while restricting their pharmacy options, as revealed in a recent report by the House Committee on Oversight and Accountability.
According to the findings, Medicare recipients could collectively save $1.5 billion on ten specific prescription drugs. The report, referenced by the Wall Street Journal, emerged from a 32-month investigation ahead of a committee hearing involving executives from the largest PBMs in the country.
PBMs are intermediary administrators for prescription drug plans linked to health insurers. They negotiate drug prices with pharmaceutical manufacturers and also determine the out-of-pocket expenses for patients.
The top three PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage around 80% of the country’s prescriptions.
The House report alleges that PBMs have developed lists of preferred medications that favor higher-priced brand-name drugs over more affordable options. For example, it cites internal communications from Cigna that discouraged opting for lower-cost alternatives to Humira, an arthritis and autoimmune disease treatment that costs approximately $90,000 annually, despite a biosimilar being available for half that price.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply through their associated mail-order service, thereby limiting patient choices.
The Federal Trade Commission (FTC) released a similar report earlier this month, indicating that a significant rise in vertical integration has allowed the six largest PBMs to oversee nearly 95% of all U.S. prescriptions.
The report’s findings raise serious concerns, with the FTC stating that prominent PBMs have gained substantial control over American access to and affordability of prescription medications. This situation fosters a landscape in which vertically integrated PBMs may prioritize their own affiliated businesses, leading to conflicts of interest that could harm independent pharmacies and inflate drug prices.
According to FTC Chair Lina M. Khan, the data highlights that these intermediaries are overcharging patients for cancer treatments, generating an additional $1 billion in revenue for themselves.