TRICARE Express Scripts Faces Lawmaker Criticism
The current TRICARE pharmacy contract with Express Scripts expires at the end of the decade, with negotiations for the 2030 cycle currently underway. But there are complications. A Senate subcommittee is demanding independent financial audits of Express Scripts following allegations that the pharmacy benefit manager overcharges the military health system.
TRICARE Express Scripts Faces Lawmaker Criticism
During a July 2026 hearing held by the Senate Armed Services Subcommittee on Personnel, lawmakers questioned executives regarding the administration of the TRICARE pharmacy program. Senator Elizabeth Warren, D-Mass., led calls for financial reviews of the company, a subsidiary of The Cigna Group.
Express Scripts has managed prescription drug benefits for more than 9 million military service members, retirees, and their families since 2003.
Overcharging the Department of Defense?
Lawmakers have presented evidence suggesting that Express Scripts charges the Department of Defense more for medications filled through its corporate mail-order channels than for those filled through retail competitors.
Congressional data indicate that the company charged the Department of Defense an average of $484 more per generic prescription drug through its internal mail-order infrastructure than through external network pharmacies.
The subcommittee examined billing examples to determine whether the company engages in spread pricing, which occurs when a pharmacy benefit manager collects more from an insurance plan than it pays the pharmacy dispensing the medicine.
In one documented transaction, a generic prescription costing $3 allegedly resulted in a $14 beneficiary copayment and a $17 administrative fee, generating $31 for the manager.
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Worst Practices?
Federal watchdogs have previously identified pricing practices in other federal healthcare sectors that the firm manages. Audits conducted by Inspectors General into the Federal Employees Health Benefits Program discovered millions of dollars in unallowable pricing mechanisms within the Compass Rose Health Plan and the American Postal Workers Union Health Plan.
In those cases, the contractor failed to pass retail pharmacy discounts, manufacturer rebates, and transaction fees back to the government.
The current structure of the TRICARE contract grants Express Scripts authority to define network participation criteria and establish reimbursement schedules.
Company leadership rejects allegations of self-dealing, anti-competitive behavior, and spread pricing. During the subcommittee hearing, Express Scripts President Adam Kautzner testified that the TRICARE agreement operates under a so-called pass-through model where savings, manufacturer discounts, and price concessions are returned directly to the Defense Health Agency.
Defense Department Resistance
Some sources report that Express Scripts executives and representatives from the Department of Defense seem to have resisted congressional requests to release specific internal TRICARE pricing data, itemized transaction records, and contract terms. The organizations decline to produce these materials by classifying the information as proprietary corporate data and trade secrets.
According to Senator Elizabeth Warren, “…for three years, I have repeatedly asked for the terms of DOD’s contract with Express Scripts only to be told that what DOD pays for prescription drugs is either ‘proprietary’ or ‘trade secret’ and people like the Chairman and me, whose job it is to conduct oversight over exactly this issue, can’t see it.”
Members of Congress are urging the Department of Defense to end what’s known as “vertical integration” in the next TRICARE pharmacy contract. It’s a reform that would prevent any company that owns retail, mail-order, or specialty pharmacies from bidding on the administrative contract.
Additional recommendations presented during the hearing included:
- Prohibiting effective-rate pricing and post-adjudication fees.
- Establishing transparent reimbursement models based on the National Average Drug Acquisition Cost.
- Eliminating federal procurement policies that penalize beneficiaries choosing community pharmacies over corporate mail delivery.
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
