A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards higher-cost medications while restricting their options for obtaining prescriptions. This report, highlighted by the Wall Street Journal, is the outcome of a 32-month investigation preceding a hearing that will involve executives from the nation’s leading PBMs.
PBMs serve as intermediaries for prescription drug plans provided by health insurers, negotiating drug prices with pharmaceutical companies and influencing the out-of-pocket costs that patients face. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—manage around 80% of all U.S. prescriptions.
The committee’s findings indicate that PBMs have been creating preferred drug lists that favor more expensive brand-name drugs over cheaper generic options. Specifically, the report highlights communications from Cigna that advised against selecting lower-cost alternatives to Humira, a treatment for arthritis and other autoimmune conditions priced at $90,000 annually, despite the availability of a biosimilar at half that cost.
Additionally, the committee observed that Express Scripts informed patients that they would incur higher costs if they chose to fill their prescriptions at local pharmacies, compared to obtaining a three-month supply via its affiliated mail-order pharmacy. This practice limits patients’ choices regarding pharmacy options.
A similar report was recently issued by the U.S. Federal Trade Commission (FTC), which indicated that growing vertical integration and concentration among PBMs allows the six largest companies to control nearly 95% of all prescriptions in the country. The FTC stated that these large PBMs now exert considerable influence over Americans’ access to affordable prescription medications, leading to a system where they may favor their own affiliated businesses, thereby putting independent pharmacies at a disadvantage and driving up drug costs.
FTC Chair Lina M. Khan pointed out that these middlemen are effectively overcharging patients for cancer medications, which has resulted in excess revenue exceeding $1 billion.