A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications while restricting their pharmacy options. This report follows a 32-month investigation by the committee and precedes a hearing featuring executives from the largest PBMs in the country.
PBMs function as intermediaries in managing prescription drug plans for health insurers, negotiating prices with pharmaceutical companies and determining patients’ out-of-pocket costs. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—handle about 80% of prescriptions in the United States.
According to the committee’s findings, PBMs have developed preferred drug lists favoring higher-priced brand-name medications over cheaper alternatives. For instance, the report highlights emails from Cigna staff that discouraged the use of lower-cost alternatives to Humira, a treatment for arthritis and other autoimmune diseases that cost around $90,000 annually, despite the availability of a biosimilar for half that price.
The investigation also uncovered that Express Scripts informed patients that filling a prescription at their local pharmacy would be more expensive than obtaining a three-month supply through its affiliated mail-order service, effectively limiting patient pharmacy choice.
Furthermore, the U.S. Federal Trade Commission (FTC) released a similar report earlier this month, stating that increasing vertical integration has allowed the six largest PBMs to manage nearly 95% of all prescriptions filled nationwide. The FTC expressed concern over the significant power PBMs wield over Americans’ access to affordable prescription medications, suggesting that their conflicts of interest may lead to higher drug costs and disadvantage unaffiliated pharmacies.
FTC Chair Lina M. Khan indicated that these findings reveal that PBMs are overcharging patients for cancer drugs, generating over $1 billion in additional revenue for themselves.