Pharmacy-benefit managers (PBMs) are directing patients toward more costly drugs and restricting their access to certain pharmacies, as highlighted in a new report by the House Committee on Oversight and Accountability.
The report, seen by the Wall Street Journal, emerged from a 32-month investigation conducted by the committee before a hearing involving top executives from the nation’s largest PBMs.
PBMs function as third-party administrators for prescription drug plans on behalf of health insurers. They negotiate drug prices with pharmaceutical companies and determine the out-of-pocket expenses for patients.
Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, which are the three largest PBMs in the US, collectively manage about 80% of prescriptions in the country.
According to the committee’s report, PBMs have curated lists of preferred medications that favor higher-cost brand-name drugs over more affordable alternatives. One example includes emails from Cigna staff that discouraged the use of cheaper alternatives to Humira, a drug for arthritis and other autoimmune conditions that cost $90,000 annually, even though biosimilars were available at half the price.
Additionally, the report found that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its associated mail-order service. This effectively restricted patients’ choice of pharmacies.
The U.S. Federal Trade Commission (FTC) released a similar report earlier this month. Its interim report revealed that the largest PBMs manage nearly 95% of all prescriptions in the United States due to increased vertical integration and market concentration.
These findings are concerning, with the FTC noting that major PBMs now wield substantial influence over Americans’ access to and affordability of prescription drugs. The system allows vertically integrated PBMs to favor their own affiliated businesses, creating conflicts of interest that can disadvantage independent pharmacies and elevate drug costs.
FTC Chair Lina M. Khan emphasized that the findings indicate PBMs are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.