A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their pharmacy options. This follows a thorough 32-month investigation by the committee prior to a hearing featuring executives from the leading PBM companies.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical firms and determining patient out-of-pocket expenses. The three largest PBMs in the U.S. – Express Scripts, OptumRx (a division of UnitedHealth Group), and Caremark (part of CVS Health) – collectively oversee around 80% of all prescriptions in the country.
According to the committee’s findings, PBMs have outlined preferred drug lists that favor higher-priced brand-name drugs over more affordable alternatives. An example noted in the report includes internal communications from Cigna that discouraged the use of lower-cost alternatives for Humira, a medication for arthritis and other autoimmune diseases costing approximately $90,000 annually, despite the availability of a biosimilar for about half that price.
Furthermore, Express Scripts informed patients that they could incur higher costs at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service, effectively limiting patients’ pharmacy choices.
The U.S. Federal Trade Commission (FTC) released a similar report recently, highlighting that the six largest PBMs manage nearly 95% of all prescriptions in the U.S. It raised concerns about how these companies wield substantial power over Americans’ access to affordable medications, indicating that this vertical integration fosters conflicts of interest and may disadvantage independent pharmacies while inflating drug prices.
FTC Chair Lina M. Khan expressed that the findings illustrate how these intermediaries impose additional costs on patients for cancer medications, generating over $1 billion in additional revenue.