A recent report from the House Committee on Oversight and Accountability asserts that pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications while restricting their pharmacy options. This report, which has been reviewed by the Wall Street Journal, is the result of a 32-month investigation and precedes a hearing involving executives from the country’s largest PBM firms.
PBMs serve 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 determine patients’ out-of-pocket costs. The three largest PBMs in the U.S. – Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark – collectively manage around 80% of U.S. prescriptions.
The committee uncovered that PBMs are promoting lists of preferred medications that include more expensive brand-name drugs instead of cheaper generic options. For instance, the report highlights communications from Cigna staff that discouraged using less expensive alternatives to Humira, a drug for arthritis and related autoimmune conditions, which costs around $90,000 annually, while at least one biosimilar was available for half the cost.
Additionally, findings indicated that Express Scripts informed patients that filling a prescription at their local pharmacy would be more costly than obtaining a three-month supply from its affiliated mail-order service, which restricted patients’ choice in pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report stating that the top six PBMs now manage nearly 95% of all prescriptions filled in the country, noting concerns over their concentrated power. The FTC emphasized that this increasing integration allows PBMs to prioritize their own affiliated businesses, creating potential conflicts of interest that could disadvantage independent pharmacies and raise drug costs for patients.
FTC Chair Lina M. Khan pointed out that these findings indicate that PBMs have been overcharging patients for critical medications like cancer drugs, generating an additional $1 billion in revenue for these intermediaries.