Pharmacy-benefit managers (PBMs) are directing patients toward costlier medications while restricting their options for obtaining them, as indicated by a new report from the House Committee on Oversight and Accountability.
This report, which was reviewed by the Wall Street Journal, is the culmination of a 32-month investigation ahead of an upcoming hearing involving executives from the country’s largest PBMs.
PBMs act as third-party administrators for prescription drug plans managed by health insurers, negotiating prices with pharmaceutical firms regarding the costs health plans will cover for various medications. They also determine the out-of-pocket expenses patients incur.
The three largest PBMs in the U.S.—Express Scripts, OptumRx (a part of UnitedHealth Group), and CVS Health’s Caremark—control roughly 80% of prescriptions across the nation.
The House Committee’s findings revealed that PBMs compile lists of preferred medications that predominantly feature higher-priced name-brand drugs rather than more affordable options. For instance, emails from Cigna staff discouraged patients from opting for cheaper alternatives to Humira, an arthritis medication priced at $90,000 annually, despite the availability of a biosimilar at about half that cost.
Furthermore, the committee discovered that Express Scripts informed patients that they would incur higher costs if they filled their prescriptions at local pharmacies instead of obtaining a three-month supply through its mail-order service. This practice effectively limits patient choice regarding pharmacy selection.
Similar concerns were raised in a recent report by the U.S. Federal Trade Commission, which indicated that due to increasing mergers and acquisitions, the six largest PBMs control nearly 95% of all prescriptions filled in the United States.
The implications are alarming. The FTC highlighted that major PBMs wield considerable influence over Americans’ access to and affordability of prescription medications. Their business model potentially fosters conflicts of interest, favoring affiliated companies and disadvantaging independent pharmacies, ultimately leading to higher drug costs.
FTC Chair Lina M. Khan commented on the findings, stating that these middlemen have been “overcharging patients for cancer drugs,” resulting in excess revenue exceeding $1 billion.