A new report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward more expensive medications and restricting where they can obtain them. This finding comes after a 32-month investigation preceding a hearing on PBMs that involved executives from the largest pharmacy-benefit managers in the country.
PBMs serve as third-party administrators for prescription drug plans offered by health insurers, negotiating costs with pharmaceutical companies on behalf of health plans. They also determine out-of-pocket expenses for patients. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—together handle around 80% of prescriptions in the U.S.
The committee’s report indicated that PBMs have developed preferred drug lists that favor higher-priced brand-name medications over more affordable options. For instance, emails disclosed from Cigna’s staff indicated they discouraged the use of more cost-effective alternatives to Humira, an arthritis treatment priced at $90,000 per year, despite the availability of at least one biosimilar at half that cost.
Additionally, Express Scripts reportedly informed patients that filling a prescription at their local pharmacy would be more expensive compared to obtaining a three-month supply from its mail-order pharmacy. This practice effectively restricts patient choices regarding pharmacy selection.
The Federal Trade Commission (FTC) released a separate report this month, stating that the increasing concentration and vertical integration of the largest PBMs allows them to manage nearly 95% of all prescriptions filled in the U.S. The FTC expressed concern about the significant power these PBMs have over patients’ access to and affordability of prescription drugs. It highlighted the potential conflicts of interest when vertically integrated PBMs favor their own affiliated entities, which could disadvantage independent pharmacies and raise drug costs.
FTC Chair Lina M. Khan noted that these findings indicate that PBMs are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue for these middlemen.