PBMs Under Fire: Pricey Drugs and Fewer Choices for Patients?

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

The detailed findings of the report, which originated from a 32-month investigation, were reviewed by the Wall Street Journal in anticipation of a forthcoming congressional hearing involving executives from the nation’s leading PBMs.

PBMs serve as intermediaries that administer prescription drug plans for health insurance providers. They negotiate prices with drug manufacturers and determine the out-of-pocket expenses faced by patients. The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—handle around 80% of all prescriptions filled in the country.

The House Committee’s report suggests that PBMs have compiled lists of preferred medications that favor higher-priced brand-name drugs over less expensive alternatives. For instance, it cites internal communications from Cigna that advised against using cheaper alternatives to Humira, an arthritis and autoimmune condition treatment valued at $90,000 annually, despite the availability of a biosimilar at half that price.

Additionally, Express Scripts allegedly informed patients that filling a prescription at their local pharmacy would lead to higher expenses compared to obtaining a three-month supply through their affiliated mail-order service. This practice is seen to limit patients’ pharmacy choices.

A recent report from the U.S. Federal Trade Commission (FTC) echoes similar concerns, indicating that the six largest PBMs control nearly 95% of all prescriptions filled nationwide due to increasing vertical integration and concentration.

The implications of these findings are alarming. The FTC noted that leading PBMs hold considerable power over Americans’ access to and affordability of prescription medications. This creates an environment where vertically integrated PBMs may tilt the scales in favor of their own associated businesses, resulting in conflicts of interest that could harm independent pharmacies and inflate drug prices.

FTC Chair Lina M. Khan emphasized that these practices have led to excessive charges for cancer medications, generating over $1 billion in additional revenue for these intermediaries.

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