Pharmacy-benefit managers (PBMs) are reportedly guiding patients towards costlier medications while restricting the pharmacies from which they can obtain them, as detailed in a recent report by the House Committee on Oversight and Accountability.
The extensive report, disclosed by the Wall Street Journal, follows a 32-month inquiry into the practices of PBMs and comes in advance of a hearing featuring executives from some of the largest PBMs in the nation.
PBMs function as third-party administrators for prescription drug plans offered by health insurers. They play a crucial role in negotiating drug prices with pharmaceutical companies and determining the out-of-pocket expenses for patients.
The three largest PBMs in the United States—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health)—control around 80% of all prescriptions in the country.
The committee’s findings indicate that PBMs tend to favor higher-priced brand-name drugs in their preferred drug lists over cheaper alternatives. For instance, emails from Cigna staff highlighted efforts to dissuade patients from opting for less expensive alternatives to Humira, a medication for arthritis and other autoimmune disorders that at the time had an annual cost of $90,000, despite the availability of at least one biosimilar priced at half that amount.
Furthermore, the report revealed that Express Scripts informed patients they would incur higher costs by obtaining prescriptions from local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service. This practice effectively reduces patients’ pharmacy choices.
In addition, the U.S. Federal Trade Commission (FTC) released a similar report earlier in the month, stating that heightened vertical integration and market concentration have enabled the six largest PBMs to oversee nearly 95% of all prescriptions in the United States.
The implications of these findings are concerning. The FTC noted that “the dominant PBMs hold substantial influence over Americans’ access to affordable prescription medications,” and this dynamic fosters a situation where “vertically integrated PBMs may prioritize their own affiliated businesses, leading to conflicts of interest that disadvantage independent pharmacies and drive up drug costs.”
FTC Chair Lina Khan emphasized that the data suggest these intermediaries are “overcharging patients for cancer medications,” which has resulted in additional revenue exceeding $1 billion for them.