Pharmacy-Benefit Managers Under Fire: Are Patients Paying the Price?

A recent report from the House Committee on Oversight and Accountability has raised concerns about the practices of pharmacy-benefit managers (PBMs), revealing that they are directing patients towards more expensive medications and restricting their pharmacy options. This investigation, which spanned 32 months, precedes a committee hearing involving executives from the largest PBMs in the nation.

PBMs act as intermediaries, managing prescription drug plans for health insurers while negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health)—together oversee around 80% of all prescriptions in the United States.

The report highlights that PBMs are prioritizing lists of higher-priced brand-name drugs while sidelining cheaper alternatives. An example noted was communication from Cigna discouraging the use of lower-priced alternatives to Humira, a drug for treating arthritis and other autoimmune conditions that costs around $90,000 annually, despite the availability of a biosimilar costing half that amount.

Moreover, the committee observed that Express Scripts informed patients they would incur higher costs at their local pharmacies compared to a three-month supply from its affiliated mail-order service, thereby constraining patients’ choices regarding where to fill their prescriptions.

A similar interim report published earlier this month by the U.S. Federal Trade Commission (FTC) mentioned that increased consolidation in the industry has led the largest PBMs to control nearly 95% of all prescriptions filled in the U.S. The FTC expressed serious concerns, stating that these PBMs wield significant power to determine Americans’ access to affordable medications, while also raising issues about potential conflicts of interest that may disadvantage independent pharmacies and inflate drug prices.

FTC Chair Lina M. Khan emphasized these findings reveal how these intermediaries may be overcharging patients for essential medications, such as cancer drugs, which has resulted in added revenues exceeding $1 billion for these middlemen.

This report sheds light on critical issues surrounding drug pricing and accessibility in the healthcare system, igniting a discussion about potential reforms to better serve patients and ensure they have access to affordable medicines. Hope remains that ongoing scrutiny may lead to greater transparency and accountability in the practices of PBMs, ultimately benefiting patients across the nation.

This situation emphasizes the necessity for continued regulatory oversight, which has the potential to create a more equitable healthcare landscape in the future.

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