According to a recent report from the House Committee on Oversight and Accountability, pharmacy-benefit managers (PBMs) are directing patients toward more costly medications and restricting access to various pharmacies. The findings followed a 32-month investigation and precede an upcoming hearing involving executives from some of the largest PBM companies.
PBMs act as intermediaries for prescription drug plans, negotiating prices on behalf of health insurers. They also determine the out-of-pocket costs that patients face. The three largest PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—handle around 80% of prescriptions in the United States.
The committee’s investigation revealed that PBMs often create lists of preferred medications that include higher-priced brand-name drugs instead of lower-cost alternatives. In one example highlighted in the report, emails from Cigna discouraged the use of cheaper substitutes for Humira, a drug for arthritis and other autoimmune disorders, which cost $90,000 annually, despite a biosimilar being available for half the price.
Additionally, Express Scripts allegedly informed patients that filling a prescription at their local pharmacy would cost more than obtaining a three-month supply from its affiliated mail-order pharmacy. This practice limits patients’ options regarding where they can obtain their medications.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that the six largest PBMs manage almost 95% of all prescriptions filled in the country due to increased consolidation within the industry. The FTC’s report expressed concerns about the significant power that leading PBMs hold over patients’ access and affordability of prescription drugs. It also pointed out that vertically integrated PBMs may favor their own affiliated businesses, creating conflicts of interest that harm independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan highlighted that the findings indicate that these middlemen are overcharging patients for cancer medications, generating over $1 billion in additional revenue.