A recent report from the House Committee on Oversight and Accountability reveals that pharmacy-benefit managers (PBMs) are directing patients toward costlier medications and restricting their pharmacy options. The report, which follows a 32-month investigation, was previewed by the Wall Street Journal prior to a hearing featuring executives from major PBM firms.
PBMs serve as intermediaries for prescription drug plans managed by health insurers, negotiating prices with pharmaceutical companies and determining patient out-of-pocket expenses. The three largest PBMs—Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark—control around 80% of prescriptions filled in the U.S.
The committee discovered that PBMs maintain lists of preferred drugs that include higher-priced brand names instead of more affordable alternatives. For instance, the report references emails from Cigna staff that recommended against cheaper substitutes for Humira, an arthritis treatment that cost $90,000 annually at that time, despite the availability of a similar biosimilar at half the price.
Additionally, Express Scripts informed patients that they would incur higher costs by filling prescriptions at local pharmacies compared to obtaining a three-month supply from its affiliated mail-order service, thereby restricting pharmacy options for patients.
Earlier this month, the U.S. Federal Trade Commission (FTC) issued a similar report noting that increased vertical integration has allowed the six largest PBMs to control nearly 95% of all U.S. prescriptions. The FTC highlighted concerns about the significant power PBMs wield over access to and affordability of prescription medications, warning that this setup can lead to conflicts of interest favoring affiliated businesses while disadvantaging independent pharmacies and raising drug prices.
FTC Chair Lina M. Khan remarked that the findings demonstrate how these middlemen are “overcharging patients for cancer drugs,” resulting in over $1 billion in additional revenue.