Pharmacy-benefit managers (PBMs) are reportedly directing patients towards more expensive medications and restricting their choices on where to obtain them, according to a recent report from the House Committee on Oversight and Accountability.
The report, which was reviewed by the Wall Street Journal, emerged following a two-and-a-half-year investigation by the committee in anticipation of a hearing involving top executives from the largest PBMs in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate with pharmaceutical companies regarding the prices health plans pay for medications and also determine patients’ out-of-pocket costs.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and Caremark (owned by CVS Health)—handle about 80% of all prescriptions filled in the country.
The committee’s findings revealed that PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna employees mentioned in the report discouraged the use of cheaper substitutes for Humira, an arthritis treatment costing around $90,000 annually, despite the availability of a biosimilar at half that price.
Furthermore, the committee reported that Express Scripts informed patients they would pay more for prescriptions filled at local pharmacies than if they used their affiliated mail-order services, thereby limiting patients’ pharmacy options.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, stating that due to increasing vertical integration and concentration, the largest six PBMs manage nearly 95% of all prescriptions filled in the country.
The findings raised concerns, as noted by the FTC, which stated that the dominant PBMs wield significant power over the accessibility and affordability of prescription medications for Americans. This vertical integration appears to favor the PBMs’ own affiliated businesses, leading to potential conflicts of interest that disadvantage independent pharmacies and result in higher drug prices for consumers.
FTC Chair Lina M. Khan emphasized that the investigations revealed that these intermediaries are “overcharging patients for cancer drugs,” resulting in more than $1 billion in additional revenue for them.