A recent report from the House Committee on Oversight and Accountability indicates that pharmacy-benefit managers (PBMs) are directing patients towards higher-cost medications while restricting their pharmacy choices. This report, which was examined by the Wall Street Journal, stems from a 32-month investigation conducted by the committee prior to a hearing featuring executives from the largest PBMs in the country.
PBMs act as intermediaries for prescription drug plans provided by health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket costs. The three largest PBMs in the United States—Express Scripts, OptumRx from UnitedHealth Group, and Caremark from CVS Health—collectively oversee about 80% of all prescriptions filled.
The committee’s findings revealed that PBMs tend to favor higher-priced brand-name medications over more affordable alternatives in their preferred drug lists. An example cited from the report mentioned Cigna employees discouraging the use of cheaper alternatives to Humira, a drug for arthritis and other autoimmune conditions, which had an annual cost of $90,000, despite the availability of a biosimilar for half that price.
Moreover, the report highlighted that Express Scripts had informed patients that receiving a three-month supply from their mail-order pharmacy would be more cost-effective than filling a prescription at local pharmacies, thus limiting patient choice in selecting their pharmacy.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a similar report. The FTC suggested that increased vertical integration and concentration in the market have empowered the six largest PBMs to manage nearly 95% of all prescriptions in the United States.
The implications of these findings are concerning. According to the FTC, the leading PBMs currently wield substantial influence over Americans’ access to and affordability of prescription medications. There are indications that this system enables vertically integrated PBMs to favor their own affiliated businesses, resulting in conflicts of interest that could harm independent pharmacies and lead to higher drug costs for consumers. FTC Chair Lina M. Khan noted that these middlemen are “overcharging patients for cancer drugs,” contributing over $1 billion in additional revenue.