A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their options for obtaining them. This report, which was reviewed by the Wall Street Journal, comes after a 32-month investigation by the committee ahead of an upcoming hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies on behalf of health plans. They also determine the out-of-pocket costs that patients will incur.
The three largest PBMs in the U.S. – Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark – collectively manage around 80% of all prescriptions filled in the country. The committee’s findings indicated that these PBMs have established lists of preferred drugs that predominantly include higher-priced brand-name medications over less expensive alternatives.
One example highlighted in the report is Cigna staff discouraging the use of cheaper alternatives to Humira, a drug treating arthritis and other autoimmune conditions, which costs approximately $90,000 annually. In contrast, at least one biosimilar available cost about half that price.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs by filling prescriptions at their local pharmacies compared to obtaining a three-month supply through its affiliated mail-order service. This tactic reportedly restricts patients’ choices for pharmacy services.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that heightened vertical integration and concentration in the market has allowed the six largest PBMs to control nearly 95% of all prescriptions filled in the United States.
The findings are concerning, with the FTC noting, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” The report highlights potential conflicts of interest as vertically integrated PBMs may prioritize their own affiliated businesses, potentially disadvantaging independent pharmacies and inflating drug prices. FTC Chair Lina M. Khan emphasized that these middlemen are “overcharging patients for cancer drugs,” resulting in an excess revenue of over $1 billion.