PBMs Under Fire: Are Your Prescription Costs Skyrocketing?

According to a recent report from the House Committee on Oversight and Accountability, pharmacy benefit managers (PBMs) are directing patients towards more expensive medications while restricting their options for obtaining these drugs.

The report, which was reviewed by the Wall Street Journal, followed a lengthy 32-month investigation by the committee prior to a scheduled hearing featuring executives from the largest PBM companies in the country.

PBMs serve as third-party administrators for prescription drug plans associated with health insurers. They negotiate pricing with pharmaceutical companies on behalf of health plans and establish out-of-pocket costs for patients.

The three largest PBMs – Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark – collectively manage approximately 80% of prescriptions in the United States.

The committee’s findings indicate that PBMs maintain lists of preferred drugs that predominantly feature higher-priced brand-name medications instead of more affordable alternatives. For instance, the report highlights communications from Cigna employees who discouraged the use of lower-cost alternatives to Humira, a medication for arthritis and other autoimmune conditions that was priced at $90,000 annually, despite the availability of a biosimilar that cost half that amount.

Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs by filling a prescription at their local pharmacy compared to obtaining a three-month supply from its affiliated mail-order service, thereby limiting patients’ pharmacy choices.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that the six largest PBMs manage nearly 95% of all prescriptions filled in the country due to increasing vertical integration and concentration within the industry.

The findings raised significant concerns, with the FTC stating, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation fosters a system where “vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can harm unaffiliated pharmacies and escalate prescription drug costs.”

FTC Chair Lina M. Khan commented that the results indicate these intermediaries are “overcharging patients for cancer drugs,” leading to an additional revenue exceeding $1 billion for these companies.

Popular Categories


Search the website