A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) may be directing patients towards more expensive medications while restricting their pharmacy options. The report, which stems from a 32-month investigation, was shared with the Wall Street Journal and comes ahead of a hearing involving major PBM executives.
PBMs act as third-party administrators for prescription drug plans and negotiate prices between health plans and drug manufacturers. Additionally, they determine the out-of-pocket expenses for patients. The largest PBMs in the U.S. — Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark — control around 80% of prescriptions in the country.
Findings from the report indicate these PBMs favor higher-priced brand-name drugs over more affordable alternatives on their preferred drug lists. For instance, internal communications from Cigna reportedly discouraged using cheaper alternatives for Humira, a medication for arthritis that costs around $90,000 annually, despite the availability of a biosimilar at about half that price.
Moreover, the report highlights that Express Scripts informed patients they would pay more at local pharmacies than if they received a three-month supply through its affiliated mail-order service, thus limiting their pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a similar report, stating that vertical integration within the PBM market has caused six major PBMs to oversee nearly 95% of all U.S. prescriptions. The FTC expressed concerns over the significant power that these leading PBMs wield over Americans’ access to affordable prescription medications. It highlighted potential conflicts of interest, where integrated PBMs may favor their affiliated businesses, thereby disadvantaging independent pharmacies and pushing up drug prices.
FTC Chair Lina M. Khan noted that these middlemen are contributing to increased costs for cancer medications, generating more than $1 billion in additional revenue.