A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications and restricting their options for obtaining these drugs. This report, which follows a lengthy 32-month investigation, precedes a hearing featuring executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies and determine the out-of-pocket expenses for patients. The three largest PBMs in the U.S.—Express Scripts, OptumRx (owned by UnitedHealth Group), and Caremark (part of CVS Health)—control about 80% of prescriptions in the country.
According to the committee’s findings, these PBMs preferentially list higher-priced brand-name medications instead of cheaper alternatives. The report references internal emails from Cigna that discouraged the use of lower-cost substitutes for Humira, a medication for arthritis and other autoimmune disorders, which had an annual cost of $90,000 at that time. In contrast, at least one biosimilar was available for half that price.
The investigation also noted that Express Scripts informed patients they would incur higher costs by filling their prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, thereby limiting patients’ choices for pharmacies.
In a similar vein, the U.S. Federal Trade Commission (FTC) issued a report earlier this month, indicating that rising vertical integration has allowed the six largest PBMs to manage nearly 95% of all U.S. prescriptions. The FTC expressed concern regarding the significant influence these leading PBMs have on Americans’ access to affordable prescription medications. It pointed out that this structure may lead to conflicts of interest as vertically integrated PBMs could favor their own businesses, potentially harming independent pharmacies and inflating drug prices.
FTC Chair Lina M. Khan remarked that the report’s findings illustrate that these intermediaries are “overcharging patients for cancer drugs,” resulting in additional revenues exceeding $1 billion.