A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more costly medications and restricting their choice of pharmacies. This report, highlighted by the Wall Street Journal, comes after a 32-month investigation prior to a hearing involving top executives from the nation’s largest PBMs.
PBMs serve as intermediary administrators of prescription drug plans for health insurers, negotiating drug prices with pharmaceutical companies and determining patients’ out-of-pocket expenses. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control approximately 80% of all prescriptions filled in the U.S.
The findings indicate that PBMs have established preferred drug lists that prioritize higher-priced brand-name medications over more affordable alternatives. For instance, the report includes communications from Cigna that recommended avoiding cheaper substitutes for Humira, a medication costing $90,000 annually at the time, while a biosimilar option was available for half the price.
Additionally, the committee reported that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply through its affiliated mail-order pharmacy, thereby limiting patients’ pharmacy choices.
Earlier this month, the U.S. Federal Trade Commission released a parallel report indicating that increased consolidation has allowed the six largest PBMs to manage nearly 95% of all U.S. prescriptions. The FTC expressed concern over the significant power these PBMs wield over the accessibility and affordability of prescription medications, suggesting that their operations may favor their own businesses, which could negatively impact independent pharmacies and elevate drug costs.
FTC Chair Lina M. Khan emphasized that the findings reveal PBMs are “overcharging patients for cancer drugs,” generating over $1 billion in additional revenue.