Pharmacy-benefit managers (PBMs) have come under scrutiny for directing patients towards costlier medications and restricting their choice of pharmacies, as detailed in a recent report from the House Committee on Oversight and Accountability.
The report, which followed a 32-month investigation and is reported by the Wall Street Journal, precedes a hearing where executives from the largest PBM companies will testify. PBMs serve as intermediaries for health insurers, negotiating prices with pharmaceutical manufacturers and determining out-of-pocket costs for patients.
The three dominant PBMs in the United States—Express Scripts, OptumRx from UnitedHealth Group, and CVS Health’s Caremark—control nearly 80% of the nation’s prescription drug market.
Key findings from the committee’s report indicated that PBMs tend to favor higher-priced brand-name drugs over less expensive alternatives in their preferred drug lists. An example highlighted in the report involved internal communications at Cigna, which rejected the use of more affordable alternatives to Humira, a medication for arthritis that was priced at $90,000 per year, despite the availability of biosimilars costing approximately half that price.
Moreover, Express Scripts allegedly informed patients that obtaining a three-month supply of medication from their mail-order pharmacy would be less expensive than filling a prescription at local pharmacies, thereby narrowing patient choices.
A report from the U.S. Federal Trade Commission (FTC) released earlier this month echoed similar concerns. It noted that the growing concentration of power within the six largest PBMs allows them to manage nearly 95% of all prescriptions filled in the U.S.
The implications of these findings are significant. The FTC warned that these leading PBMs wield excessive influence over the affordability and accessibility of prescription medications for many Americans. Additionally, this situation fosters an environment where vertically integrated PBMs may prioritize their affiliated businesses, creating potential conflicts of interest that disadvantage independent pharmacies and drive up drug costs.
FTC Chair Lina M. Khan pointed out that such practices have resulted in patients being overcharged for cancer medications, contributing over $1 billion in additional revenue for these middlemen.