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Pharmacy-benefit managers (PBMs) are steering patients toward more expensive drugs and limiting where they can get them, according to a new report from the House Committee on Oversight and Accountability.
The report, viewed by the Wall Street Journal, followed a 32-month investigation by the committee ahead of a hearing on PBMs involving executives from the nation’s largest managers.
PBMs are third-party administrators of prescription drug plans for health insurers. They negotiate with pharmaceutical companies on how much a health plan will play for a drug. These managers also set the out-of-pocket costs for patients.
Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health’s Caremark, the nations’ three largest PBMs, manage approximately 80% of U.S. prescriptions.
The committee’s report found that PBMs have created lists of preferred drugs that contain higher-priced brand names over cheaper alternatives, the Wall Street Journal reported.
For example, the report cites emails from staff at Cigna that discouraged the use of cheaper alternatives to Humira, a treatment for arthritis and other autoimmune condition that cost $90,000 per year at the time. At least one biosimilar was available for half that price.
The committee also found that Express Scripts told patients that they would end up paying more for filling a prescription at their local pharmacy than they would getting a three-month supply from the its affiliated mail-order pharmacy. The committee wrote that this limited patients’ choice of what pharmacy they could use.
The U.S. Federal Trade Commission published a similar report earlier this month. The FTC said in its interim report that “increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.”
The results are troubling. “The leading PBMs now exercise significant power over Americans’ ability to access and afford their prescription drugs,” the FTC said. It also creates a system in which “vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs.”
FTC Chair Lina M. Khan said the findings show that the middlemen are “overcharging patients for cancer drugs,” bringing them additional revenue of more than $1 billion.
- Ben Kesslen contributed to this article.