A new report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients toward higher-priced medications while restricting their access to alternatives. The findings, highlighted by the Wall Street Journal, follow a 32-month investigation and precede an upcoming hearing featuring executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans provided by health insurers. They negotiate prices with pharmaceutical companies and determine patient out-of-pocket costs. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of prescriptions in the U.S.
The report indicates that these managers have developed lists of preferred medications that prioritize more expensive brand-name drugs over less costly generics. For instance, emails from Cigna’s staff discouraged the use of cheaper alternatives to Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Additionally, the investigation uncovered practices by Express Scripts that informed patients they would incur higher costs for prescriptions filled at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice appears to limit patient pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, noting that the consolidation of power among the six largest PBMs enables them to manage nearly 95% of all prescriptions dispensed in the United States. The FTC expressed concern over the significant influence these PBMs have on Americans’ access to affordable medications, indicating that their business practices could disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan highlighted that these middlemen are effectively “overcharging patients for cancer drugs,” which contributes an excess of $1 billion in revenue to their operations.