Unpacking the PBM Profit Machine: Are Patients Paying the Price?

A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients towards pricier medications while restricting their pharmacy options.

The report, which followed a 32-month investigation, is set to precede a hearing involving leaders from major PBMs. These organizations act as intermediaries for health insurers, negotiating drug prices with pharmaceutical companies and determining the out-of-pocket expenses for patients.

The report highlights the dominance of the three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—which collectively manage around 80% of U.S. prescriptions. It reveals that these PBMs have curated lists of preferred medications that often feature higher-priced brand-name drugs over less expensive alternatives.

For instance, it includes emails from Cigna showing that staff were discouraging patients from using more affordable options for Humira, a medication for arthritis and other autoimmune disorders that was priced at $90,000 per year, despite the availability of a biosimilar at half that cost.

Additionally, the committee found that Express Scripts misled patients into believing they would incur higher costs by using their local pharmacy compared to obtaining a three-month supply from their affiliated mail-order service, effectively limiting patient choices.

Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report, indicating that the six largest PBMs now oversee nearly 95% of all prescriptions in the U.S. The FTC’s findings highlight the considerable influence PBMs have over patients’ access to affordable medications, noting that tasking vertically integrated PBMs with a preference for their affiliated businesses can create conflicts of interest, driving up drug prices.

FTC Chair Lina M. Khan pointed out that these middlemen are “overcharging patients for cancer drugs,” resulting in additional revenues exceeding $1 billion.

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