A recent report from the House Committee on Oversight and Accountability reveals troubling practices by pharmacy-benefit managers (PBMs), suggesting they are directing patients towards more costly medications while restricting options on where these can be obtained.
This report, which was obtained by the Wall Street Journal, comes after an extensive 32-month investigation into PBMs, just prior to a hearing featuring executives from the country’s largest management firms. PBMs serve as third-party administrators of prescription drug plans for health insurers, playing a crucial role in negotiating prices with pharmaceutical companies and determining patient out-of-pocket expenses.
The three largest PBMs in the United States—Express Scripts, OptumRx (a subsidiary of UnitedHealth Group), and Caremark (part of CVS Health)—collectively manage around 80% of the nation’s prescriptions.
Key findings from the report indicate that PBMs often maintain preferred drug lists that prioritize higher-priced brand-name medications over more affordable alternatives. For instance, it references internal communications from Cigna that discouraged the use of cost-effective substitutes for Humira, a treatment for autoimmune conditions that was priced at $90,000 annually, when a biosimilar option was available for about half that cost.
Additionally, the committee noted that Express Scripts informed patients they would incur greater expenses by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, thereby limiting patients’ pharmacy options.
The U.S. Federal Trade Commission (FTC) recently released a similar report highlighting that the six largest PBMs now handle nearly 95% of all prescriptions dispensed in the United States due to increasing consolidation and vertical integration.
These developments raise significant concerns, as the FTC stated that “leading PBMs exert substantial control over Americans’ access to and affordability of prescription drugs,” leading to a situation where conflicts of interest can arise, potentially disadvantaging independent pharmacies and driving up costs for patients. FTC Chair Lina M. Khan remarked that the findings indicate these intermediaries are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for the PBMs.