A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications while restricting their pharmacy choices. This report comes after a 32-month investigation and precedes a hearing involving top executives from the largest PBMs in the country.
PBMs, which act as third-party administrators for health insurers’ prescription drug plans, negotiate prices with pharmaceutical companies and determine the out-of-pocket expenses for patients. The three major PBMs—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (part of CVS Health)—manage about 80% of prescriptions filled in the U.S.
The committee’s findings indicated that PBMs have prioritized higher-priced brand-name drugs on their preferred drug lists, often favoring these over less costly alternatives. For instance, the report included emails from Cigna staff discouraging the use of cheaper alternatives to Humira, a medication for arthritis and other autoimmune diseases that cost around $90,000 annually—while a biosimilar version was available for about half that price.
Furthermore, the committee noted that Express Scripts informed patients that using their local pharmacies would result in higher costs compared to obtaining a three-month supply from their affiliated mail-order service, thus limiting patients’ choices in selecting pharmacies.
Additionally, a report from the U.S. Federal Trade Commission (FTC) earlier this month corroborated these concerns, indicating that increasing consolidation among PBMs has allowed the six largest entities to control nearly 95% of all prescriptions in the U.S. The FTC expressed alarm over the significant power these PBMs hold over the affordability and accessibility of medications for Americans. They pointed out that vertically integrated PBMs could favor their own businesses, leading to conflicts of interest that could harm independent pharmacies and inflate prescription costs.
FTC Chair Lina M. Khan highlighted that these intermediaries are overcharging patients for essential cancer drugs, generating over $1 billion in additional revenue in the process.