Unveiling the Hidden Costs: Are Your Medications More Expensive Because of PBMs?

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 their access to pharmacies. This finding follows a 32-month investigation and precedes a hearing featuring executives from the largest PBMs in the U.S.

PBMs serve as third-party administrators for health insurers’ prescription drug plans, negotiating prices with pharmaceutical companies and determining out-of-pocket costs for patients. The three largest PBMs—Express Scripts, OptumRx, and Caremark—manage around 80% of prescriptions in the United States.

The committee’s report indicates that PBMs have developed preferred drug lists favoring higher-priced brand-name medications over cheaper options. For instance, internal emails from Cigna discouraged using less expensive alternatives to Humira, an arthritis treatment priced at $90,000 annually, while a similar biosimilar was available for half that cost.

Furthermore, Express Scripts informed patients that they could incur higher costs when filling prescriptions at local pharmacies compared to obtaining a three-month supply from their affiliated mail-order service. This practice limits patient choice regarding pharmacies.

Earlier this month, the U.S. Federal Trade Commission (FTC) released a related report, indicating that six major PBMs control nearly 95% of all prescriptions in the country. The FTC described the situation as alarming, noting that leading PBMs hold considerable power over Americans’ access to affordable medications. It highlighted potential conflicts of interest arising from vertical integration within PBMs that benefit their affiliated businesses while disadvantaging independent pharmacies and raising drug prices.

According to FTC Chair Lina M. Khan, these findings suggest that PBMs may be significantly overcharging patients for cancer treatments, generating over $1 billion in extra revenue.

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