A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their options for obtaining these drugs.
This report, reviewed by the Wall Street Journal, follows a 32-month investigation and is set to precede a congressional hearing featuring executives from the country’s leading PBMs.
PBMs serve as third-party administrators for prescription drug plans under health insurers, negotiating prices with pharmaceutical companies and establishing out-of-pocket costs for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescriptions filled in the U.S.
The committee’s findings indicate that PBMs maintain preferred drug lists that favor higher-priced brand-name drugs over less costly alternatives. For instance, internal communications from Cigna were highlighted, where staff discouraged the use of a less expensive alternative to Humira, a drug costing approximately $90,000 per year, although a biosimilar was available at half that price.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to getting a three-month supply from its affiliated mail-order service, effectively narrowing patients’ choices.
Earlier this month, the U.S. Federal Trade Commission also released a similar report, noting that the increasing merger activity among PBMs has led to the six largest firms managing nearly 95% of all prescriptions in the U.S.
The findings are concerning, as the FTC stated that the dominant PBMs hold considerable influence over the accessibility and affordability of prescription medications for Americans. The commission pointed out that this situation creates conflicts of interest, as vertically integrated PBMs may favor their own associated businesses, potentially disadvantaging independent pharmacies and raising drug costs.
FTC Chair Lina M. Khan emphasized that the evidence suggests these intermediaries are overcharging patients for cancer treatments, resulting in over $1 billion in additional revenue for these companies.