According to a recent report by the House Committee on Oversight and Accountability, pharmacy benefit managers (PBMs) are not only steering patients towards more expensive medications but are also limiting their pharmacy options. This finding comes after a 32-month investigation ahead of a hearing featuring executives from the country’s largest PBMs.
PBMs act as third-party administrators for prescription drug plans offered by 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 – collectively manage around 80% of the nation’s prescriptions.
The report highlighted that PBMs have developed lists of preferred medications that tend to favor higher-priced brand-name drugs over less expensive alternatives. For instance, the committee referenced internal communications from Cigna that discouraged the use of cheaper alternatives to Humira, an arthritis medication costing approximately $90,000 annually, while a biosimilar version was available for about half that price.
Additionally, the investigation revealed that Express Scripts informed patients that they would pay more for prescriptions filled at their local pharmacies compared to receiving a three-month supply from its affiliated mail-order service, effectively limiting patient choice in pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increased concentration and vertical integration has allowed the six largest PBMs to manage nearly 95% of prescriptions filled in the United States.
The FTC expressed concern over these findings, noting that leading PBMs wield considerable power over patients’ access to affordably priced prescription drugs. It raised alarms over a system where vertically integrated PBMs may preferentially support their own affiliates, potentially disadvantaging independent pharmacies and driving up drug prices. According to FTC Chair Lina M. Khan, these middlemen are significantly overcharging patients for cancer medications, translating to an additional revenue spike of over $1 billion.