A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their options for where to obtain these drugs.
The report, which followed a 32-month investigation and was reviewed by the Wall Street Journal, sets the stage for an upcoming hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate with pharmaceutical companies to determine the prices that health plans will pay for medications and also establish the out-of-pocket expenses for patients.
The three largest PBMs in the U.S.—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—collectively manage around 80% of prescriptions nationwide.
The committee’s findings indicate that PBMs have developed lists of preferred drugs that tend to favor higher-priced brand-name medications over more affordable options. For instance, the report references emails from Cigna that discouraged the use of cheaper alternatives to Humira, a medication for arthritis and other autoimmune diseases that costs $90,000 annually, despite the existence of a biosimilar priced at half that amount.
Additionally, the report highlighted that Express Scripts informed patients they would incur higher costs if they chose to fill their prescriptions at local pharmacies compared to getting a three-month supply from its affiliated mail-order pharmacy. This practice effectively limits patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that increasing vertical integration among PBMs has allowed the six largest to manage nearly 95% of all prescriptions filled in the country.
The implications of these findings are concerning. The FTC noted that the leading PBMs wield substantial power over Americans’ access to affordable prescription medications. This situation fosters a landscape where vertically integrated PBMs may favor their own businesses, leading to conflicts of interest that disadvantage independent pharmacies and escalate prescription drug costs.
FTC Chair Lina M. Khan remarked that the evidence points to middlemen overcharging patients for cancer medications, contributing an excess of $1 billion in revenue for these intermediaries.