Pharmacy benefit managers (PBMs) are directing patients towards more costly medications while restricting their options for obtaining prescriptions, according to a report released by the House Committee on Oversight and Accountability.
The report, which was reported by the Wall Street Journal, follows a 32-month investigation by the committee in anticipation of a hearing featuring executives from the nation’s major PBMs.
PBMs operate as third-party administrators for prescription drug plans provided by health insurers, negotiating with pharmaceutical companies on the pricing of drugs under health plans. They also determine the out-of-pocket costs that patients are required to pay.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (UnitedHealth Group), and Caremark (CVS Health)—manage around 80% of prescriptions filled in the country.
The committee’s findings indicate that PBMs have established lists of preferred medications that prioritize higher-priced brand-name drugs over more affordable alternatives. For instance, the report highlights emails from Cigna employees that discouraged opting for less expensive alternatives to Humira, a medication for arthritis and other autoimmune disorders that costs $90,000 annually, despite the availability of a biosimilar at half that price.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs by getting their prescriptions from local pharmacies rather than ordering a three-month supply through its affiliated mail-order service. This practice effectively limits patients’ pharmacy choices.
A similar report was recently published by the U.S. Federal Trade Commission (FTC), which stated that growing vertical integration and consolidation in the industry has allowed the six largest PBMs to manage nearly 95% of all U.S. prescriptions.
The findings raised significant concerns. The FTC noted, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” It further suggested that this creates a landscape in which “vertically integrated PBMs appear to have the ability and incentive to favor their own affiliated businesses, leading to conflicts of interest that may disadvantage independent pharmacies and inflate prescription drug prices.”
FTC Chair Lina M. Khan remarked that the evidence shows these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.