A recent report from the House Committee on Oversight and Accountability has revealed that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications and restricting their options for obtaining them. This report follows a 32-month investigation and is set to precede a hearing involving executives from the largest PBMs in the country.
PBMs act as third-party administrators for prescription drug plans, negotiating prices between health insurers and pharmaceutical companies while also determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—currently manage around 80% of prescriptions in the U.S.
The report indicates that these managers have developed preferred drug lists favoring higher-priced branded medications over more affordable alternatives. For instance, emails from Cigna staff highlighted practices that dissuaded the use of cheaper alternatives to Humira, a costly treatment for arthritis and autoimmune diseases, which was priced at $90,000 annually, while a biosimilar was available for about half that amount.
Additionally, the committee found that Express Scripts informed patients they would pay more at local pharmacies compared to acquiring a three-month supply from its affiliated mail-order service, effectively limiting patient choices for pharmacy services.
Earlier this month, the Federal Trade Commission (FTC) released a similar report stating that the top six PBMs control nearly 95% of all U.S. prescriptions due to increasing vertical integration and concentration in the industry. The FTC expressed concern that the dominant position of PBMs allows them to significantly influence the accessibility and affordability of prescription drugs, while creating potential conflicts of interest by favoring their affiliated businesses over independent pharmacies.
FTC Chair Lina M. Khan remarked that the findings illustrate how these intermediaries are overcharging patients for medications like cancer drugs, contributing over $1 billion in additional revenue for the PBMs.