A new report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their pharmacy options. The report, reviewed by the Wall Street Journal, comes after a 32-month investigation by the committee prior to a 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 establish the out-of-pocket expenses for patients. 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 committee’s findings indicated that PBMs have developed preferred drug lists that favor more expensive brand-name medications over affordable alternatives. One example cited was Cigna’s internal communications that discouraged the use of lower-cost alternatives to Humira, an arthritis treatment priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Furthermore, the report noted that Express Scripts advised patients they would incur higher costs by filling prescriptions at local pharmacies rather than opting for a three-month supply through its mail-order service. This practice limits patients’ choices in selecting their pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that increased vertical integration has allowed the six largest PBMs to manage approximately 95% of all prescriptions filled in the U.S. The FTC expressed concern over the power these PBMs hold over Americans’ access to affordable medications, highlighting that this situation creates conflicts of interest that may favor their affiliated businesses over independent pharmacies. FTC Chair Lina M. Khan pointed out that these middlemen are significantly overcharging patients for cancer medications, generating additional revenues exceeding $1 billion.