A recent report by the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their pharmacy options. This report, which was reviewed by the Wall Street Journal, follows a 32-month investigation leading up to a hearing involving executives from the largest PBM companies in the U.S.
PBMs serve as third-party administrators of prescription drug plans for health insurers, negotiating drug prices with pharmaceutical companies and determining patient out-of-pocket costs. The three largest PBMs—Express Scripts, OptumRx (owned by UnitedHealth Group), and CVS Health’s Caremark—manage around 80% of the prescriptions in the United States.
The committee’s findings indicate that PBMs often create preferred drug lists that feature higher-priced brand-name medications over more affordable alternatives. For instance, emails from Cigna staff discouraged the use of lower-cost alternatives for Humira, a medication for arthritis and other autoimmune disorders, which cost approximately $90,000 annually. There were biosimilar options available at half that price.
Additionally, the committee observed practices from Express Scripts that suggested patients would incur higher costs filling prescriptions at local pharmacies compared to using its affiliated mail-order pharmacy for a three-month supply, thereby limiting patient pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) released a similar report, indicating that the six largest PBMs now handle nearly 95% of all U.S. prescriptions due to increasing vertical integration and industry concentration. The FTC expressed concern that these dominant PBMs wield significant influence over Americans’ access to and affordability of prescription drugs. This situation raises the potential for conflicts of interest, as integrated PBMs may prefer their own businesses, potentially disadvantaging independent pharmacies and contributing to higher drug prices.
FTC Chair Lina M. Khan pointed out that these intermediaries are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.