A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy options. This report follows a 32-month investigation and precedes a hearing involving executives from the country’s largest PBMs.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The top three PBMs—Express Scripts, OptumRx (owned by UnitedHealth Group), and Caremark (a CVS Health subsidiary)—manage around 80% of U.S. prescriptions.
The committee’s findings indicate that these PBMs create preferred drug lists that favor higher-priced brand-name medications over more affordable alternatives. For instance, the report highlights internal communications from Cigna that discouraged the use of less expensive substitutes for Humira, an arthritis treatment that costs about $90,000 annually, despite at least one biosimilar option being available at half the price.
Furthermore, the committee discovered that Express Scripts informed patients they would incur higher costs at local pharmacies compared to filling a prescription through their affiliated mail-order service, thereby limiting patient choice.
Earlier this month, the U.S. Federal Trade Commission (FTC) published a report echoing these concerns, noting that the six largest PBMs manage nearly 95% of all prescriptions filled in the country due to increasing vertical integration. The FTC’s report warns that the leading PBMs wield significant power over Americans’ access to and affordability of prescription drugs, and their practices may create conflicts of interest by favoring their own affiliated businesses, potentially disadvantaging independent pharmacies and driving up drug prices.
FTC Chair Lina M. Khan emphasized that these middlemen are effectively overcharging patients for cancer medications, generating an additional revenue of over $1 billion for PBMs.