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 choices. The report, which was reviewed by the Wall Street Journal, is a result of a 32-month investigation leading up to a hearing featuring top executives from leading PBMs.
PBMs serve as intermediaries administering prescription drug plans for health insurers, negotiating prices between pharmaceutical companies and health plans, while also determining out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—account for about 80% of prescriptions filled in the U.S.
According to the committee’s findings, PBMs have established preferred drug lists that favor higher-priced branded medications over more affordable alternatives. Notably, the report highlighted communications from Cigna that discouraged the use of cheaper substitutes for Humira, a treatment that costs $90,000 annually, despite the availability of biosimilars priced at about half that amount.
The committee also pointed out instances where Express Scripts informed patients that they would incur higher costs at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thereby limiting patients’ pharmacy options.
A similar study was released earlier this month by the U.S. Federal Trade Commission (FTC), which found that increased concentration in the market allows the largest six PBMs to control nearly 95% of all prescriptions in the U.S. The FTC’s report expresses concern that dominant PBMs hold significant power over Americans’ access to affordable medications. This situation creates a scenario in which vertically integrated PBMs may favor their own affiliated businesses, leading to potential conflicts of interest that hurt unaffiliated pharmacies and inflate drug prices.
FTC Chair Lina M. Khan emphasized that the findings indicate these intermediaries are “overcharging patients for cancer drugs,” with resultant revenues exceeding $1 billion.