Troops may face inflated drug costs under Tricare, lawmakers say

A bipartisan group of 24 congressional lawmakers is questioning whether the Pentagon’s pharmacy contract may be driving up drug costs and limiting access to medication for Tricare beneficiaries, while overcharging independent pharmacies and taxpayers.

The lawmakers are concerned that the Defense Health Agency has decided to retain Express Scripts as the sole pharmacy benefit manager for Tricare, the military insurance system serving 9.6 million troops, retirees and their families.

In a letter sent Wednesday to Assistant Secretary of Defense for Health Affairs Lester Martinez-Lopez and DHA director Army Lt. Gen. Telita Crosland, the lawmakers questioned whether Express Scripts may be using anticompetitive tactics to overcharge Tricare.

Express Scripts is the second-largest pharmacy benefit manager in the country. PBMs act as middlemen for pharmacies, drug companies and insurers and play a key role in negotiating drug prices between the various players, as well as helping to decide which medicines an insurer will cover.

Critics argue PBMs’ often secretive work has forced scores of Americans to overspend on medication or kept them from being able to access the medicine they need. PBM proponents argue they ultimately drive down costs in the medical system and ensure the prescription drug enterprise runs smoothly.

The letter, led by Sen. Elizabeth Warren, D-Mass., Sen. Mike Rounds, R-S.D., Sen. Peter Welch, D-Vt., and Rep. Buddy Carter, R-Ga., demands answers by July 2 from defense officials on how they monitor the Express Scripts contract, how robust the pharmacy network is, and whether DHA tracks Express Scripts’ denials for expensive specialty drugs requested by Tricare beneficiaries. Twenty additional members of Congress signed onto the letter.

At issue is the narrow set of companies through which troops and their families receive medicine under Tricare health plans.

Tricare members can obtain prescription drugs through two entities: Express Scripts, which handles nonspecialty medication, or Accredo, which handles specialty drugs for conditions like cancer and multiple sclerosis. Accredo has served as Tricare’s primary in-network specialty pharmacy since the beginning of 2023, though patients can buy specialty drugs through other pharmacies as well.

Both companies are Cigna subsidiaries. Lawmakers worry the arrangement makes Tricare customers vulnerable to higher drug prices, and may ultimately drive up the cost to taxpayers who cover government-provided health insurance.

“Because Cigna also owns Accredo, it can effectively keep much of its business in-house, using its [pharmacy benefit manager Express Scripts] to steer patients to its own pharmacy while disadvantaging competitors,” the lawmakers wrote.

Lawmakers want to know whether DHA has compared the prices Express Scripts charges for specialty drugs through Accredo versus what it charges for the same drugs at independent pharmacies. They also ask how much Express Scripts charges for each of the 10 most frequently prescribed products purchased through Accredo, and how much it charges for the same prescriptions when they are purchased through independent pharmacies.

In a statement provided to Military Times, Express Scripts officials said Tricare beneficiaries aren’t required to fill the majority of specialty prescriptions through Accredo, “though many choose to because of the highly personalized support they receive from their pharmacists, nurses, clinicians, dietitians and social workers.”

Company officials said they provide Tricare beneficiaries “with high quality, affordable health care while achieving billions of dollars in savings for the government and taxpayers. Tricare beneficiaries have access to the full range of generic, brand, and specialty medications on the market today through our robust network of chain, independent, military, specialty and home delivery pharmacies.”

Tricare members have fewer independent and retail pharmacies to rely on than they did a few years ago. In 2022, 15,000 pharmacies left the Tricare network while refusing to accept the contract’s terms for reimbursement from Express Scripts. After public pressure, Express Scripts reopened its network, but fewer than 5,000 pharmacies rejoined.

“This exodus of independent and retail pharmacies can be catastrophic for Tricare beneficiaries, especially for those with complex medical conditions who are ill-served by mail-order pharmacies,” the lawmakers wrote.

There are currently more than 42,000 pharmacies, including nearly 12,000 independent pharmacies in the Tricare network. Ninety-eight percent of beneficiaries have a Tricare retail pharmacy within a 15-minute drive.

Lawmakers ask how the Defense Health Agency verifies that Express Scripts obeys patient access requirements, including that at least one in-network pharmacy is located within a 15-minute drive of 90% of Tricare beneficiaries.

They noted that the Defense Health Agency can revise the terms of the contract or leave the exclusive agreement with Express Scripts each year until the contract ends in December 2029.

A DHA spokesperson on Friday declined to comment on the letter: “It isn’t appropriate for us to comment on questions until we have responded formally to the members of Congress.”

The agency has previously told Military Times that the contract allows Express Scripts to use its own discretion in contracting with pharmacies to establish a competitively priced network that meets contract access standards, directly passing savings to the government.