ICYMI: At Hearing, Military Leaders Agree with Warren: DoD Must Audit Giant Health Care Contractors That Price Gouge Taxpayers
“DHA is paying Express Scripts billions of taxpayer dollars to manage the TRICARE benefit and negotiate with itself – and DHA isn’t even bothering to check the books.”
Washington, D.C. – At a hearing of the Senate Armed Services Committee, U.S. Senator Elizabeth Warren (D-Mass.) asked Lieutenant General Dr. Douglas J. Robb of the U.S. Air Force about price gouging in the military’s prescription drug system.
Senator Warren slammed the Defense Health Agency for failing to rein in Cigna-owned Express Scripts, the nation’s second largest pharmacy benefit manager (PBM) that manages the prescription drug system for nearly 10 million servicemembers, military retirees, and their family members. Since 2009, the giant PBM has leveraged its $4.3 billion contract to steer patients away from local pharmacies and towards Accredo, a giant pharmacy business that Express Scripts also owns. Now, recent investigations and whistleblower complaints reveal that Express Scripts is failing to report tens of thousands of expensive, specialty drug prescriptions funneled to Accredo, potentially overcharging taxpayers by billions of dollars – just as the company has done in other taxpayer-funded government programs.
Senator Warren called for the Defense Health Agency to audit Express Scripts and for a requirement of that audit to be included in this year’s National Defense Authorization Act.
Lieutenant General Robb agreed that this taxpayer overcharging is “unfair” and said that Express Scripts needs to “follow what is the business policy and what is the contractual law.”
Major General Dr. Paul A. Friedrichs of the U.S. Air Force pointed to the Veterans Health Administration’s prescription drug system, which uses an in-house PBM, as an example of “how to deliver better care and, where possible, do it more efficiently,” and called for collaboration between the agency and Congress to emulate that system for servicemembers and their families in TRICARE.
Transcript: Hearing to Receive Testimony on Stabilizing the Military Health System to Prepare for Large-Scale Combat Operations
Senate Armed Services Committee
March 11, 2025
Senator Elizabeth Warren: Thank you, Mr. Chairman. So, we need a medical healthcare system that works in wartime – but the one we have is failing us in peacetime. And I think we need to do better on this. Fixing TRICARE’s prescription drug benefit is part of that.
Since 2009, TRICARE has outsourced to Express Scripts, a massive pharmacy benefit manager, PBM. The Defense Health Agency, DHA, pays Express Scripts to negotiate with pharmacies, deciding where servicemembers can pick up their prescriptions and what price they’re going to pay.
But Express Scripts also owns Accredo, a massive pharmacy that participates in TRICARE. And DHA has been allowing all kinds of self-dealing between these two entities.
Here’s one: DHA used to require Express Scripts to maintain a network of 50,000 pharmacies. But in 2021, Express Scripts negotiated that down to 35,000. Then it turned around and told thousands of pharmacies that they don’t own to either take money-losing terms or get kicked out of TRICARE.
General Robb, you used to oversee the TRICARE network before this gaming started, but do you have any idea how many pharmacies have left just since 2022?
Lieutenant General Dr. Douglas J. Robb, U.S. Air Force: Senator Warren, I have been out of that business since 2016. So –
Senator Warren: Okay, I just wondered if you’d happened to know how many had left. I’ll take a no.
Lieutenant General Robb: No, ma’am. I do not.
Senator Warren: Well, it’s over 13,000 pharmacies left this network, and most of them are independent pharmacies, community pharmacies. That has forced 400,000 servicemembers and their families to find new pharmacies, and many of them have been pushed to the Express Scripts-owned Accredo.
Even worse, Express Scripts has set up Accredo as the primary off-base pharmacy where military families can fill specialty drug prescriptions – you know, these are the really expensive cancer drugs, rheumatoid arthritis drugs that make up over half of the $8 billion in TRICARE prescription drug spend. So it’s a lot of money here.
And it doesn’t end there. As we speak, Express Scripts is facing a whistleblower lawsuit that alleges the company systematically overfilled TRICARE prescriptions at Accredo, saddling DoD with, “billions-of-dollars in excess dispensing fees and drug resupplies.” And this isn’t a surprise. Express Scripts has been found to massively overfill and overpay for prescriptions at Accredo, which they own, in other government programs.
General Robb, since last year, an audit uncovered that Express Scripts was leveraging its contract with the West Virginia Public Employees system to send inflated payments to Accredo for expensive specialty drugs, in some cases inflating the price by 100-fold more than the cost of dispensing the exact same drugs at a competing pharmacy. I imagine you think this type of taxpayer overcharging is unacceptable, is that fair, General Robb?
Lieutenant General Robb: I would agree with that it would be unfair, yes ma'am.
Senator Warren: DHA is supposed to audit Express Scripts's pharmacy data to make sure the same thing isn’t happening at TRICARE. But DHA said it hadn’t completed an audit because DHA had "no concerns about data accuracy." Talk about being asleep at the wheel here.
In just the first quarter of 2023, Express Scripts dispensed 70,000 specialty drug perceptions at Accredo, but the company only reported about 40,000 to DHA. In other words, Accredo failed to report nearly half of the expensive specialty drugs dispensed at its own pharmacy, which were paid for by DHA. They get the money but they don't tell DHA what is going on here.
General Robb, after completing their investigation, GAO sensibly recommended that DHA periodically audit Express Scripts' reported data for accuracy which, by the way, is already required in the contract. So this is telling them basically to follow through on the contract. Do you agree with GAO's recommendation?
Lieutenant General Robb: I would agree that they need to follow what is the business policy and what is the contractual law.
Senator Warren: You know, I just want to say, and I’ll close up here. DHA is paying Express Scripts billions of taxpayer dollars to manage the TRICARE benefit and negotiate with itself. And DHA isn’t even bothering to check the books. I think everyone in the room agrees that Express Scripts ought to pass an audit and that ought to be required in this year's NDAA.
Chair Wicker: Thank you, Senator Warren.
Major General Dr. Paul A. Friedrichs, U.S. Air Force (Ret.): Mr. Chairman, may I add a comment to that? Is there time?
Chair Wicker: You certainly may, yes.
Major General Friedrichs: Thank you very much. I would hold up the Veterans Health Administration's exemplary mail-order program, which has worked for years, as an opportunity – again, going back to the concept of how to deliver better care and, where possible, do it more efficiently. There's a real opportunity for this committee, in partnership with the appropriate VA oversight committees, to direct a comparison of the two systems and then bring back recommendations for the best practices between the two.
Pharmaceuticals are growing in cost, and that is not going to change. But this is an area in which the Veterans Health Administration actually has done this well for years with high patient satisfaction and, more importantly, the patients get the meds they need when they need them. There's a real opportunity to learn from the VA here.
Chair Wicker: Thank you very much.
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