A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are guiding patients towards more expensive medications while restricting their choice of pharmacies. This report comes after a 32-month investigation and precedes a hearing featuring executives from the largest PBMs in the nation.
PBMs serve as intermediaries for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients. Currently, the three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions in the U.S.
The investigation disclosed that PBMs often maintain lists of preferred medications that favor higher-priced brand-name drugs over less expensive alternatives. For instance, the report highlighted internal communications from Cigna that suggested avoiding lower-cost alternatives to Humira, a medication priced at $90,000 annually, even though a biosimilar was available for half that cost.
Furthermore, the committee noted that Express Scripts informed patients that they would incur higher costs when filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This practice effectively constrains patients’ pharmacy choices.
In a similar vein, the U.S. Federal Trade Commission (FTC) released a report this month stating that the increasing consolidation among PBMs allows the six largest firms to oversee nearly 95% of all prescriptions in the U.S. The FTC expressed concern over the significant influence these PBMs have over Americans’ access to affordable medications. This vertically-integrated system creates potential conflicts of interest, favoring affiliated businesses and leading to higher drug prices for consumers.
FTC Chair Lina M. Khan emphasized that these findings indicate that PBMs are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for these intermediaries.