A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more costly medications while restricting access to where these drugs can be obtained. This finding is based on a comprehensive 32-month investigation and precedes a hearing involving executives from the country’s largest PBMs.
PBMs serve as intermediaries for health insurers that manage prescription drug benefits. They negotiate drug prices with pharmaceutical manufacturers and establish the out-of-pocket costs that patients must pay. The three leading PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control about 80% of the nation’s prescription market.
The committee’s investigation uncovered that PBMs often create lists of favored medications that prioritize expensive brand-name drugs over more affordable generics. One instance highlighted in the report involves internal communication from Cigna discouraging the use of less costly alternatives to Humira, a drug for arthritis, which was priced at $90,000 annually at that time, despite the availability of a similar biosimilar for half that cost.
Additionally, Express Scripts allegedly informed patients that they would incur higher costs at local pharmacies compared to ordering a three-month supply from its own mail-order pharmacy, thereby limiting patient choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report echoing similar concerns, indicating that increasing consolidation has allowed the six largest PBMs to manage nearly 95% of all prescriptions filled in the United States.
The findings have raised significant alarms. The FTC noted that the dominant PBMs wield considerable influence over Americans’ access to affordable medications. This situation leads to potential conflicts of interest, where vertically integrated PBMs may favor their own affiliated companies, disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan emphasized that the data indicates these intermediaries are overcharging patients for cancer medications, resulting in more than $1 billion in additional revenue for them.