A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their pharmacy options. The investigation, which lasted 32 months and precedes a committee hearing with executives from major PBMs, highlights concerning practices in the industry.
PBMs function as intermediaries for prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket costs. The three largest PBMs—Express Scripts, OptumRx (UnitedHealth Group), and Caremark (CVS Health)—together oversee around 80% of prescriptions in the U.S.
The report indicates that PBMs maintain lists of preferred drugs skewed towards higher-priced brand-name medications rather than more affordable alternatives. For instance, it mentions communications from Cigna that discouraged the use of cost-effective options for Humira, a treatment that was priced at $90,000 annually at the time, despite the availability of a biosimilar for approximately half that cost.
Additionally, the committee discovered that Express Scripts misled patients about the costs of filling prescriptions, suggesting they would face higher expenses at local pharmacies than if they opted for a three-month supply from Express Scripts’ mail-order service, thereby limiting patient pharmacy choices.
Furthermore, the Federal Trade Commission (FTC) released a similar report, highlighting that the concentration and vertical integration of the six largest PBMs allow them to manage nearly 95% of U.S. prescriptions. The findings indicate that these dominant PBMs wield substantial influence over patients’ access to affordable medications, creating a landscape where conflicts of interest arise, potentially prioritizing their own affiliated businesses and inflating drug costs.
FTC Chair Lina M. Khan noted that these practices lead to overcharging patients, particularly for cancer medications, generating additional revenues exceeding $1 billion.