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 options for obtaining them.
The report, highlighted by the Wall Street Journal, emerged after a 32-month investigation by the committee, which is preparing for a hearing featuring executives from the largest PBM firms in the country. PBMs serve as third-party administrators for prescription drug plans offered by health insurers. They negotiate prices with pharmaceutical companies and determine patients’ out-of-pocket expenses.
The three dominant PBMs in the U.S.—Express Scripts, OptumRx (part of UnitedHealth Group), and CVS Health’s Caremark—control around 80% of the nation’s prescriptions. According to the committee’s findings, these managers have established lists of preferred medications that often prioritize higher-priced brand name drugs over more affordable alternatives.
For instance, the report references internal communications from Cigna that discouraged using lower-cost options for Humira, a drug prescribed for arthritis and other autoimmune conditions, which had a yearly cost of $90,000 at the time. A biosimilar treatment was available for about half that price.
Additionally, the committee revealed that Express Scripts informed patients they would incur higher costs when filling prescriptions at local pharmacies instead of opting for a three-month supply from its affiliated mail-order service, effectively limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a report echoing similar concerns. It noted that the increasing concentration and vertical integration among the six largest PBMs has led them to manage nearly 95% of all prescriptions filled in the U.S.
The FTC expressed concern about the considerable power these leading PBMs wield over the affordability and accessibility of prescription drugs in America. The report suggests a system where PBMs may favor their own affiliated entities, creating potential conflicts of interest that disadvantage independent pharmacies and escalate drug prices.
FTC Chair Lina M. Khan commented that these middlemen are “overcharging patients for cancer drugs,” which reportedly generates over $1 billion in additional revenue for them.