WASHINGTON, D.C. – Rep. Earl L. “Buddy” Carter (R-GA) and Senator Elizabeth Warren (D-MA) sent a letter to Assistant Secretary of Defense for Health Affairs Dr. Lester Martinez-Lopez and Director of the Defense Health Agency (DHA) Lieutenant General Telita Crosland, raising concerns over Express Scripts’ exclusive contract to administer TRICARE’s pharmacy program.
Express Scripts – owned by Cigna – is the second largest pharmacy benefit manager (PBM) in the country, which also owns its own mail-order pharmacy, Accredo. With this vertically integrated structure, Express Scripts routinely leverages its exclusive contract with DHA to keep much of its business in-house, steering TRICARE members to Accredo while disadvantaging competitors – including rural, independent pharmacies that servicemembers and their families rely on.
For example, in August 2022, Express Scripts offered pharmacies that compete with Accredo such unworkable contract terms that nearly 15,000 pharmacies left the TRICARE network, forcing 400,000 active-duty and retired military families to decide between searching for a new in-network pharmacy or simply opting into Accredo’s mail-order option.
In the letter, the lawmakers write: “[The] exodus of independent and retail pharmacies can be catastrophic for TRICARE members, especially those with complex medical conditions who are ill-served by mail-order pharmacies.”
In addition to the well-documented harms on competing pharmacies and TRICARE beneficiaries, the lawmakers are concerned that Express Scripts may be leveraging its exclusive contract to overcharge taxpayers, as vertically integrated PBMs routinely mark up drug prices to pad their bottom lines. A Wall Street Journal investigation found that Express Scripts charged commercial insurers 27.4 times more for a selection of generic specialty drugs at Accredo compared to Cost Plus Drugs, an independent pharmacy the Wall Street Journal used as a baseline.
The lawmakers continue: “Express Scripts may be employing [anticompetitive] tactics to overcharge TRICARE – a taxpayer-funded program – for drugs dispensed at Accredo, leveraging its TRICARE contract to underpay competitors and overpay its related companies.”
The letter is also signed by U.S. Senators Rounds and Welch, and U.S. Representatives Robert Aderholt, Rick Allen, Rebecca Balint, Stephanie Bice, James Comer, Donald Davis, Madeleine Dean, Neal Dunn, Mike Flood, Diana Harshbarger, Henry Johnson, Jennifer Kiggans, Mariannette Miller-Meeks, Ralph Norman, Katie Porter, John Rose, Adrian Smith, Abigail Spanberger, Claudia Tenney, and Bruce Westerman.
Read the full letter here.
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