Pharmacy-benefit managers (PBMs) are reportedly directing patients towards more costly medications while restricting their pharmacy options, according to a new report released by the House Committee on Oversight and Accountability.
The report, reviewed by the Wall Street Journal, comes after a 32-month investigation by the committee, which precedes a hearing involving executives from the largest PBM firms in the country.
PBMs serve as third-party administrators for prescription drug plans provided by health insurance companies. They negotiate prices with pharmaceutical companies and determine the out-of-pocket costs for patients.
The three largest PBMs in the United States—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control approximately 80% of prescriptions in the country.
The committee’s findings reveal that PBMs have been creating preferred drug lists that favor high-priced brand-name medications over more affordable options. For instance, the report highlights internal communications from Cigna that advised against using cheaper alternatives to Humira, a drug that was costing patients around $90,000 annually, despite the existence of a biosimilar priced at half that amount.
Additionally, the report indicates that Express Scripts informed patients they would incur higher costs at local pharmacies compared to obtaining a three-month supply through their affiliated mail-order service, thereby limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, noting that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.”
The commission expressed concern that these developments grant PBMs substantial power over Americans’ access to and affordability of prescription medications. The report also pointed out that vertically integrated PBMs might prioritize their affiliated businesses, leading to conflicts of interest that could harm independent pharmacies and elevate drug costs.
FTC Chair Lina M. Khan emphasized that the findings demonstrate how intermediaries are “overcharging patients for cancer drugs,” contributing to over $1 billion in additional revenue.