A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting their pharmacy choices. This assessment follows a 32-month investigation and precedes a hearing involving executives from the largest PBM firms in the country.
PBMs act as third-party administrators for prescription drug plans on behalf of health insurers, negotiating drug prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions in the United States.
According to the committee’s findings, PBMs have established preferred drug lists that prioritize higher-cost brand-name medications over lower-cost alternatives. For instance, the report highlights emails from Cigna staff that discouraged the use of less expensive substitutes for Humira, a drug for arthritis and other autoimmune diseases that costs around $90,000 annually, despite a biosimilar available for half that price.
The investigation also revealed that Express Scripts informed patients they would incur higher costs by using their local pharmacies compared to ordering a three-month supply through its mail-order service, thereby limiting patient choice.
In a related note, the U.S. Federal Trade Commission (FTC) released an interim report earlier this month stating that increased vertical integration among the top six PBMs has allowed them to manage nearly 95% of the prescriptions filled in the country. The FTC described these findings as concerning, emphasizing that top PBMs possess considerable influence over patients’ access to affordable medications. The report indicates a troubling situation where vertically integrated PBMs may favor their own affiliated businesses, potentially harming unaffiliated pharmacies and elevating drug costs.
FTC Chair Lina M. Khan underscored that the investigation highlighted how these middlemen are overcharging patients for essential medications, such as cancer drugs, which has resulted in an excess revenue of over $1 billion.