A recent report from the House Committee on Oversight and Accountability raises serious concerns about the practices of pharmacy-benefit managers (PBMs). The investigation revealed that PBMs are directing patients towards more expensive drugs while also limiting their options for where those drugs can be obtained. The findings come ahead of an anticipated hearing featuring executives from the largest PBM companies.
PBMs act as intermediaries for health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket costs. The report indicates that major PBMs, such as Express Scripts, OptumRx, and CVS Health’s Caremark, oversee around 80% of all prescriptions filled in the United States.
One troubling discovery is that these managers have constructed lists of preferred medications that favor higher-priced branded drugs over cheaper generic options. For instance, the report highlights internal communications from Cigna that discouraged the use of more affordable alternatives to Humira, a medication that costs about $90,000 annually, despite the availability of a biosimilar option priced at half that amount.
Furthermore, Express Scripts reportedly misled patients about their potential costs by informing them that they would pay less for a three-month supply by using its mail-order service compared to filling a prescription at a local pharmacy. This practice restricts patient choice regarding where they can fill their prescriptions.
Compounding these concerns, a recent interim report from the U.S. Federal Trade Commission (FTC) noted that the six largest PBMs now control nearly 95% of the prescriptions filled in the nation. The FTC highlighted that the increasing concentration of PBMs leads to significant power over patients’ access and costs for prescribed medications. This vertical integration raises concerns about potential conflicts of interest, particularly as these entities seem inclined to favor their affiliated businesses, often at the expense of independent pharmacies and patient affordability.
FTC Chair Lina M. Khan emphasized that these practices have resulted in overcharges for patients, particularly for critical medications like cancer drugs, generating more than $1 billion in extra revenue for PBMs.
This situation underscores the urgent need for regulatory scrutiny and reform to ensure that patients can access affordable medications without undue influence from intermediaries. As the investigation unfolds, there is hope that increased transparency and accountability in the pharmaceutical system will lead to better outcomes for patients across the nation.
Summary: The House Committee on Oversight and Accountability’s report reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive drugs while limiting their pharmacy choices. This practice raises concerns about patient access and affordability, as highlighted by the FTC’s report on the growing power of PBMs in the prescription drug market. Both reports call for greater regulatory oversight to protect patients and promote fair competition within the pharmaceutical industry.