‘Big Three’ PBMs to Face House Oversight Accountability as Hawaii Court Delivers Legal Victory

The three biggest pharmacy benefit managers will come before the House Committee on Oversight and Accountability to explain their role in the increasing medication prices in the U.S., according to an announcement on Tuesday by committee Chairman James Comer (R-Ky.).

The hearing, set for July 23, will include Adam Kautzner, president of Evernorth Care Management and Express Scripts, David Joyner, executive vice president of CVS Health and president of CVS Caremark, and Patrick Conway, CEO of OptumRx. According to Comer’s announcement, the session will probe how these pharmacy middlemen reinforce anticompetitive practices in the industry, in turn increasing prescription drug prices and compromising patient care.

Comer added in the statement that lawmakers across the aisle have “sounded the alarm” on the role of pharmacy benefit managers (PBM)—and their “anticompetitive tactics”—in increasing drug prices.

“Spread pricing and rebates benefit PBMs and have helped the three largest PBMs monopolize the pharmaceutical market,” Comer continued. “It’s clear these self-benefitting practices only serve to help their bottom line rather than patients.”

Also on Tuesday, the Federal District Court of Hawaii tossed the state’s lawsuit alleging that the three biggest PBMs were artificially and unlawfully hiking drug prices. Hawaii’s state attorney general has 45 days to file an amended complaint.

The state of Hawaii sued the top three PBMs—CVS Caremark, Express Scripts and OptumRx—in October 2023, claiming that they employed unlawful business practices, which in turn “have driven skyrocketing prices for brand-name prescription medications.” Among the practices that the lawsuit named was charging pharma companies rebates in exchange for favorable formulary placements for their drugs.

PBMs also charged drugmakers several other fees, none of which helped lower drug prices for patients at the point of sale, the lawsuit alleged. “Pay-to-play practices directly harm consumers both by artificially inflating the price of medications and by restricting consumers’ access to medications that could save or greatly increase the quality of their lives,” deputy attorney general Ciara Kahahane said at the time.

These double developments on Tuesday come amid mounting scrutiny of PBMs. Earlier this month, the U.S. Federal Trade Commission (FTC) published an interim report showing that the top three PBMs handled nearly 80% of all prescriptions dispensed by pharmacies across the country. The antitrust watchdog also found that these middlemen “can hike the cost of drugs” and overcharge patients for cancer therapies, according to FTC Chair Lina Khan.

A few days later, The Wall Street Journal reported that the FTC was gearing up to sue CVS Caremark, OptumRx and Express Scripts over alleged anticompetitive practices.