Senate Pushes for Audit of TRICARE Pharmacy Program Amid Conflict-of-Interest Concerns Over Express Scripts' Dual Role
核心洞察
Senate lawmakers are seeking an independent audit of the TRICARE (搜索) pharmacy program over concerns that Express Scripts (搜索), the program's exclusive administrator, may be steering business toward its own mail-order pharmacies.
Since a 2021 contract renewal, approximately 15,000 independent and community pharmacies have left the TRICARE (搜索) network after Express Scripts (搜索) drastically reduced reimbursement rates, with one pharmacist citing an average loss of $9 per prescription.
Sen. Elizabeth Warren obtained contract language allowing Express Scripts (搜索) to perform post-adjudication offsets, which critics describe as a "complex shell game" that could disadvantage competing pharmacies.
The Senate Armed Services Committee is advancing legislation that would require an independent audit of the Defense Department's multibillion-dollar TRICARE (搜索) pharmacy program, as lawmakers intensify scrutiny of Express Scripts (搜索)' dual role as both pharmacy benefit manager (PBM) and operator of competing mail-order pharmacies.
The committee's version of the fiscal 2027 defense policy bill includes a provision directing the comptroller general to examine how Express Scripts (搜索) reimburses its own pharmacies versus their competitors within the TRICARE (搜索) network. The push comes amid growing concerns that the contractor's vertically integrated structure may be driving independent pharmacies out of the program while steering business toward its own operations.
"That seems to me to be a pretty clear conflict of interest," Sen. Elizabeth Warren (D-Mass.) said during a Senate Armed Services Personnel Subcommittee hearing on Wednesday.
Pharmacist Testimony Highlights Reimbursement Crisis
Micah Lansford, pharmacist-owner of Roden-Smith Pharmacy in Clovis, New Mexico, which serves the military community at Cannon Air Force Base, testified that he was forced to leave the TRICARE (搜索) program in 2023 after determining the new contract terms would result in an average loss of $9 on each medication order. Based on his prescription volume, Lansford estimated an annual loss of $60,000.
"We were pushed out of the system by contract terms that made a difficult situation impossible," Lansford told the subcommittee.
Since Express Scripts (搜索) was awarded the TRICARE (搜索)'s 5th Generation Pharmacy Contract in 2021—an eight-year agreement worth up to $4.3 billion—approximately 15,000 independent and community pharmacies have exited the network. The new contract allowed Express Scripts to reduce the minimum number of in-network pharmacies from 50,000 to 35,000.
"No contractor should be allowed to referee a game while also competing in it. Military families experience the consequences while the contractor reports that the system is working just fine," Lansford added.
Contract Language Raises Red Flags
Warren disclosed during the hearing that she obtained a copy of the contract pharmacies were required to sign in 2022 to remain in the TRICARE (搜索) network. One provision states that Express Scripts (搜索) maintains the right to "aggregate reimbursement reconciliation and offset methodology," meaning the contractor could adjust payments to pharmacies after claims have been processed.
"In about 20 years of practicing law, that might be the biggest smoking gun document I've seen in a hearing," said Greg Reybold, vice president of the American Pharmacy Cooperative. "When you take that provision, which gives them the right to move money around after the fact across plans, we are essentially talking about a complex shell game."
Warren also noted that inspector general audits have previously identified spread pricing issues in other federal health programs administered by Express Scripts (搜索). In 2024, the Office of Personnel Management inspector general found that Express Scripts overcharged the American Postal Workers Union Health Plan and the federal government by roughly $45 million.
Adam Kautzner, president of Express Scripts (搜索) and Evernorth Care Management, stated that the contractor "does not engage in spread pricing" within the TRICARE (搜索) program.
"DoD and Express Scripts (搜索) say there is no spread pricing in the TRICARE (搜索) contract, but the same language that Express Scripts used to milk other government plans out of millions of dollars is also present in TRICARE. We may well find that Express Scripts is playing the same games in TRICARE or not, but we can't tell without an independent audit," Warren said.
Defense Department Response
Defense officials pushed back against the characterization, arguing that the TRICARE (搜索) pharmacy program operates differently from commercial PBM models. David Smith, acting director of the Defense Health Agency (搜索) and a retired Navy rear admiral, told the committee that the Defense Department controls pricing while Express Scripts (搜索) provides administrative services.
"We are essentially the PBM," Smith said.
The Defense Department reported that TRICARE (搜索)'s pharmacy program offers at least one in-network retail pharmacy within a 15-minute drive for more than 98% of beneficiaries. Smith also noted that pharmaceutical spending represents one of the fastest-growing components of the department's health expenditures, with savings achieved through negotiated discounts for prescription drugs.
"Continued growth in specialty pharmaceuticals, biologics and chronic disease therapies will require ongoing efforts to preserve affordability while maintaining high-quality care for beneficiaries," Smith said.
Looking Toward the Next Contract
The current contract with Express Scripts (搜索) is set to expire in December 2029. Warren urged the Defense Department to "flatly prohibit vertical integration" in the next contract, arguing that "a vertically integrated PBM has every incentive to line its own pockets, and DoD should not be using taxpayer dollars to fund these schemes."
Warren also presented a Defense Department report finding that it cost the military 12.5% more, on average, to dispense a 30-day supply of generic drugs through the Express Scripts (搜索) mail-order pharmacy than at retail pharmacies.
Assistant Secretary of Defense for Health Affairs Keith Bass promised the committee to conduct an annual review of the contract and to disclose differences in reimbursement rates between retail pharmacies and Express Scripts (搜索)' affiliated pharmacies, though Congress has yet to receive that information.
"We cannot expect service members to maintain peak readiness if they cannot reliably access the medications they need," said Sen. Tommy Tuberville (R.-Ala.), the subcommittee chairman. "We need to strike the right balance between controlling costs and ensuring access."