Pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their choices in pharmacies, as highlighted in a new report from the House Committee on Oversight and Accountability.
The report, reviewed by the Wall Street Journal, is the result of a 32-month investigation by the committee in preparation for a hearing involving executives from the largest PBMs in the country.
PBMs act as intermediaries for prescription drug plans provided by health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs in the United States—Express Scripts, OptumRx (a division of UnitedHealth Group), and Caremark (part of CVS Health)—control roughly 80% of the nation’s prescriptions.
According to the committee’s findings, PBMs have developed preferred drug lists that favor higher-priced brand-name medications over less expensive alternatives. The report included examples, such as internal communications at Cigna that discouraged the use of cheaper options for Humira, a treatment for arthritis and other autoimmune diseases priced at around $90,000 annually, despite a comparable biosimilar available for half that cost.
Additionally, the committee noted that Express Scripts informed patients that they might incur higher costs by purchasing prescriptions at their local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, thus limiting patients’ pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report stating that increased vertical integration among PBMs has allowed the six largest companies to control nearly 95% of all prescriptions filled across the nation.
The findings are concerning, according to the FTC, which stated that “the leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This situation fosters an environment where “vertically integrated PBMs seem to have the motive and means to favor their own affiliated businesses, leading to potential conflicts of interest that could disadvantage independent pharmacies and escalate drug prices.”
FTC Chair Lina M. Khan emphasized that the research indicates these intermediaries are “overcharging patients for cancer drugs,” generating more than $1 billion in additional revenue for the companies involved.