A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards higher-priced medications while restricting their options for obtaining them.
According to the report, which was examined by the Wall Street Journal, this finding comes after a 32-month investigation and is timed with an upcoming hearing featuring executives from the largest PBM companies in the United States.
PBMs, which serve as intermediaries managing prescription drug plans for health insurers, negotiate prices with pharmaceutical companies and determine patient out-of-pocket costs. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control approximately 80% of all prescriptions in the country.
The committee’s report highlights that PBMs have established preferred drug lists that favor costlier brand-name drugs over less expensive alternatives. For instance, it points to Cigna internal communications that recommended against using cheaper substitutes for Humira, a medication for arthritis and other autoimmune disorders that carries a yearly cost of $90,000, despite the availability of a biosimilar at half that price.
Additionally, the committee found that patients at Express Scripts were informed that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through the company’s affiliated mail-order service. This practice effectively limits patient choice regarding pharmacies.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report indicating that heightened vertical integration and concentration allow the six largest PBMs to oversee nearly 95% of all prescriptions filled in the U.S. These findings prompted concerns regarding the substantial power that leading PBMs wield over Americans’ access to affordable prescription drugs. Furthermore, this arrangement has raised issues of conflict of interest, where vertically integrated PBMs may favor their own affiliated businesses, disadvantaging independent pharmacies and contributing to elevated drug prices.
FTC Chair Lina M. Khan emphasized that the research demonstrates that these intermediaries are “overcharging patients for cancer drugs,” resulting in more than $1 billion in additional income for them.