A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting their access to certain pharmacies. This report, which was provided to the Wall Street Journal, is the result of a 32-month investigation prior to a hearing involving executives from the largest PBMs in the nation.
PBMs function as third-party administrators of prescription drug plans for health insurance providers, negotiating prices with pharmaceutical companies. They also determine out-of-pocket expenses for patients.
The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage about 80% of all prescriptions filled in the country.
Findings from the committee’s report indicate that PBMs have created preferred drug lists that feature higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna employees discouraged the use of less expensive substitutes for Humira, a treatment for arthritis and other autoimmune disorders, which had a price tag of $90,000 per year, even though a biosimilar was available for around half that cost.
Additionally, the committee discovered that Express Scripts informed patients they would incur higher charges if they filled their prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order pharmacy. This practice limits patients’ choices in pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that increased vertical integration and concentration in the industry allow the six largest PBMs to control nearly 95% of all U.S. prescriptions.
The findings are concerning, as the FTC noted, “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs.” This creates a landscape where “vertically integrated PBMs appear to have the ability and incentive to favor their own affiliated businesses, leading to conflicts of interest that disadvantage independent pharmacies and drive up drug costs.”
FTC Chair Lina M. Khan highlighted that these middlemen are “overcharging patients for cancer drugs,” leading to additional revenues exceeding $1 billion.