A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are pushing patients toward pricier medications and restricting their pharmacy options. This report comes after a 32-month investigation leading up to a hearing involving executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans under health insurers, negotiating prices with pharmaceutical companies and determining out-of-pocket expenses for patients. The three largest PBMs, Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health, collectively manage around 80% of prescriptions in the U.S.
The committee’s findings indicate that PBMs prioritize more expensive branded medications over cheaper alternatives. An example highlighted in the report involves emails from Cigna, which discouraged the use of affordable substitutes for Humira, a treatment for arthritis and other autoimmune conditions that had a price tag of $90,000 annually, despite the availability of a biosimilar for half that cost.
Furthermore, the committee reported that Express Scripts informed patients they would incur higher costs if they filled prescriptions at local pharmacies compared to obtaining a three-month supply through its own mail-order service, thereby limiting patient choice in pharmacy selection.
Recently, the U.S. Federal Trade Commission (FTC) released a similar report stating that the six largest PBMs now oversee nearly 95% of all U.S. prescriptions. The FTC expressed concern about the significant power these PBMs wield over Americans’ access to and affordability of medications. The report suggests that the vertical integration of PBMs fosters a conflict of interest favoring their own affiliated businesses, which can disadvantage independent pharmacies and escalate drug prices.
FTC Chair Lina M. Khan remarked that these findings indicate PBMs are significantly increasing costs for patients, particularly for cancer treatments, resulting in an additional revenue gain of over $1 billion for the middlemen.