A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications while restricting their pharmacy options. This investigation, which lasted 32 months, was conducted in advance of a hearing featuring executives from the country’s largest PBMs.
PBMs function as third-party administrators for health insurers’ prescription drug plans, negotiating prices for medications with pharmaceutical companies and determining patients’ out-of-pocket costs. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—oversee about 80% of prescriptions filled in the United States.
According to the committee’s findings, PBMs have established preferred drug lists that favor higher-priced brand-name medications rather than cheaper alternatives. An instance highlighted in the report was an email from Cigna staff discouraging the use of less expensive alternatives to Humira, a costly treatment for autoimmune conditions priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
The report also noted that Express Scripts informed patients that filling prescriptions at local pharmacies would be more expensive than obtaining a three-month supply from their mail-order pharmacy, thereby limiting patient choice regarding pharmacy selection.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report indicating that the six largest PBMs control about 95% of all U.S. prescriptions. The FTC deemed the situation concerning, stating that these dominant PBMs hold considerable influence over Americans’ access to affordable prescription medications. The report highlighted potential conflicts of interest within vertically integrated PBMs, which may favor their own affiliated businesses and disadvantage independent pharmacies while driving up drug costs.
FTC Chair Lina M. Khan expressed concern that these middlemen are “overcharging patients for cancer drugs,” leading to additional profits exceeding $1 billion.