A recent report from the House Committee on Oversight and Accountability highlights how pharmacy-benefit managers (PBMs) are directing patients towards more expensive medications and restricting their pharmacy options. This report follows a lengthy 32-month investigation and precedes a hearing featuring executives from the country’s largest PBMs.
PBMs function as intermediaries for prescription drug plans, negotiating prices with pharmaceutical companies and establishing the out-of-pocket costs patients must pay. The three largest PBMs in the U.S.—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of the nation’s prescriptions.
The committee’s findings reveal that PBMs often compile lists of preferred medications that favor costly brand-name drugs over more affordable alternatives. One example noted in the report involves Cigna employees advising against the use of cheaper alternatives to Humira, a drug priced at $90,000 annually for arthritis and autoimmune conditions, despite the existence of biosimilars costing half that amount.
Additionally, the report indicated that Express Scripts informed patients they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service. This practice limits patient choice regarding where to fill their prescriptions.
Similar concerns were echoed in a recent report by the U.S. Federal Trade Commission (FTC), which stated that the significant consolidation and integration in the PBM industry have led to six major PBMs handling nearly 95% of U.S. prescriptions.
The FTC’s findings are alarming, indicating that the leading PBMs hold substantial influence over Americans’ access to and affordability of prescription medications. They also suggest that the structure of vertically integrated PBMs may foster conflicts of interest, potentially disadvantaging independent pharmacies and driving up medication costs. FTC Chair Lina M. Khan emphasized that these intermediaries are reportedly “overcharging patients for cancer drugs,” leading to additional profits exceeding $1 billion.