Comer Releases Report on PBMs’ Harmful Pricing Tactics and Role in Rising Health Care Costs
WASHINGTON—Today, House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) issued a report outlining how the three largest Pharmacy Benefit Managers (PBMs) —CVS Caremark, Express Scripts, and OptumRx—have monopolized the pharmaceutical marketplace by deploying deliberate, anticompetitive pricing tactics that are raising prescription drug prices, undermining community pharmacies, and harming patients across the United States. The House Oversight Committee will hold a hearing with PBM executives today at 10:00am ET.
“Instead of prioritizing the health of Americans across the country, evidence obtained by the House Oversight Committee shows how the three largest pharmacy benefit managers colluded to line their own pockets. These self-benefitting pricing tactics pushed by PBMs have done nothing but jeopardize patient care, undermine local pharmacies, and raise prescription drug prices,” said Chairman Comer. “Since 2021, the Committee has made it a priority to expose harmful PBM practices and advance legislative solutions to ensure greater transparency and accountability in the PBM industry. Americans deserve access to affordable, life-saving medications and the Committee will continue to work in a bipartisan fashion to shine a light on PBMs and restore competition in the pharmaceutical marketplace.”
Today’s report, entitled “The Role of Pharmacy Benefit Managers in Prescription Drug Markets,” includes evidence obtained by the Committee showing how PBMs inflate prescription drug costs and interfere with patient care for their own financial benefit. The report concludes that the present role of PBMs in prescription drug markets is failing and requires Congress and states to implement legislative reforms to increase the transparency of the PBM market.
Below are key findings from the report:
The three largest PBMs have used their position as middlemen and integration with health insurers, pharmacies, providers, and recently manufacturers, to enact anticompetitive policies and protect their bottom line. The Committee found evidence that PBMs share patient information and data across their many integrated companies for the specific and anticompetitive purpose of steering patients to pharmacies a PBM owns. Furthermore, the Committee found that PBMs have sought to use their position to artificially reduce reimbursement rates for competing pharmacies.
PBMs frequently tout the savings they provide for payers and patients through negotiation, drug utilization programs, and spread pricing, even though evidence indicates that these schemes often increase costs for patients and payers. The Committee identified numerous instances where the federal government, states, and private payers have found PBMs to have utilized opaque pricing and utilization schemes to overcharge plans and payers by hundreds of millions of dollars.
The largest PBMs force drug manufacturers to pay rebates in exchange for the manufacturers’ drugs to be placed in a favorable tier on a PBM’s formulary, making it difficult for competing, lower-priced prescriptions (often generics or biosimilars) to get on formularies. The Committee has found evidence that PBMs regularly place higher cost medications in more preferable positions based on their formularies, even when there are lower-cost and equally safe and effective competing options.
As many states and the federal government weigh and implement PBM reforms, the three largest PBMs have begun creating foreign corporate entities and moving certain operations abroad to avoid transparency and proposed reforms. The Committee found that these PBMs have created group purchasing organizations (GPOs) to centralize the negotiation of rebates and fees in Switzerland and Ireland. They have also created companies in Ireland and the Cayman Islands to manufacture and market certain highly profitable generics and biosimilars. The creation of entities in locations well known for their lack of financial transparency and movement of operations that would be subject to impending regulations only heightens concerns that PBMs will do anything to avoid transparency.
The largest PBMs’ use of tools such as prior authorizations, fail first policies, and formulary manipulations have significant detrimental impacts on Americans’ health outcomes. The Committee found that the use of these tools enables PBMs to slow the market uptake of cheaper generics and biosimilars. Furthermore, the Committee found that these tools often delay and negatively impact patient care.
The anticompetitive policies of the largest PBMs have cost taxpayers and reduced patient choice. The Committee found that PBMs have intentionally overcharged or withheld rebates and fees from many taxpayer-funded health programs. Additionally, the Committee found that in these taxpayer-funded health programs, PBMs use their position as middlemen to steer patients to the pharmacies they own rather than pharmacies that may have closer proximity or provide better care.
Click here to read the report.
Click here to read the report appendix
Supporting documents can be found here: