At a Senate Armed Services Committee hearing prior to the Congressional recess, Sen. Elizabeth Warren (D-MA) questioned witnesses about the military healthcare system.
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NewsTranscript
00:00Thank you Senator Caley. Senator Warren. Thank you Mr. Chairman. So we need a
00:05medical health care system that works in wartime but the one we have is failing
00:10us in peacetime and I think we need to do better on this. Fixing Tricare's
00:15prescription drug benefit is part of that. Since 2009 Tricare has outsourced
00:22to Express Scripts a massive pharmacy benefit manager, PBM. The Defense Health
00:29Agency, DHA, pays Express Scripts to negotiate with pharmacies deciding where
00:35service members can pick up their prescriptions and what price they're
00:39going to pay. But Express Scripts also owns Acredo, a massive pharmacy that
00:46participates in Tricare and DHA has been allowing all kinds of self-dealing
00:52between these two entities. Here's one. DHA used to require Express Scripts to
00:58maintain a network of 50,000 pharmacies but in 2021 Express Scripts negotiated
01:05that down to 35,000 pharmacies. Then they turned around and told thousands of
01:11pharmacies that they don't own either to take money-losing terms or get kicked
01:17out of Tricare. General Rob, you used to oversee the Tricare network before this
01:23gaming started. Do you have any idea how many pharmacies have left just since
01:292022? And I have been out, Senator Warren, I've been out of that business since
01:362016. Okay, so I just wonder if you happen to know how many had left. No ma'am, no
01:42ma'am, I do not. Well it's over 13,000 pharmacies have left this network and
01:47most of them are independent pharmacies, community pharmacies. That has forced
01:53400,000 service members and their families to find new pharmacies and many
01:59of them have been pushed to the Express Scripts-owned Accredo. Even worse, Express
02:06Scripts has set up Accredo as the primary off-base pharmacy where military
02:12families can fill specialty drug prescriptions. You know, these are the
02:16really expensive cancer drugs, rheumatoid arthritis drugs that make up
02:22over half of the $8 billion in Tricare prescription drug spending. So it's a lot
02:29of money here. It doesn't end there. As we speak, Express Scripts is facing a
02:35whistleblower lawsuit that alleges the company systematically overfilled Tricare
02:41prescriptions at Accredo, saddling DOD with quote billions of dollars in excess
02:48dispensing fees and drug resupplies. And this isn't a surprise. Express Scripts
02:54has been found to massively overfill and overpay for prescriptions at Accredo,
03:00which they own, in other government programs. So General Rob, since last year
03:07an audit uncovered that Express Scripts was leveraging its contract with the
03:13West Virginia Public Employees System to send inflated payments to Accredo for
03:20expensive specialty drugs, in some cases inflating the price by a hundredfold more
03:26than the cost of dispensing exactly the same drug at a competing pharmacy. I
03:31imagine you think this kind of taxpayer overcharging is unacceptable. Is that
03:36fair, General Rob? I would agree with that, would be unfair, yes ma'am. Okay, DHA is
03:44supposed to audit Express Scripts pharmacy data to make sure that that
03:49same thing isn't happening at Tricare, but DHA said it hadn't completed an
03:55audit because DHA had quote no concerns about data accuracy. You know, talk about
04:03being asleep at the wheel here. In just the first quarter of 2023, Express Scripts
04:11dispensed 70,000 specialty drug prescriptions at Accredo, but the company
04:18only reported about 40,000 to DHA. In other words, Accredo failed to report
04:25nearly half of the expensive specialty drugs dispensed at its own pharmacy,
04:30which were paid for by DHA. So they get the money, but they don't tell DHA what's
04:36going on here. General Rob, after completing their investigation, GAO
04:41sensibly recommended that DHA periodically audit Express Scripts
04:47reported data for accuracy, which by the way is already required in the contract.
04:53So this is telling them basically to follow through on the contract. Do you
04:57agree with GAO's recommendation? I would agree that they need to follow what is
05:04the business policy and what is the contractual requirements. Yes ma'am. You
05:11know, I just want to say, and I'll close up here, DHA is paying Express Scripts
05:16billions of taxpayer dollars to manage the Tricare benefit and negotiate with
05:22itself. And DHA isn't even bothering to check the books. I think that everyone in
05:28this room agrees that Express Scripts ought to pass an audit and that ought to
05:32be required in this year's NDAA. Thank you, Mr. Chairman. Thank you, Senator Warren.
05:38Mr. Chairman, may I add a comment to that? Is there time? You certainly may, yes.
05:42Thank you very much. I would hold up the Veterans Health Administration's
05:47exemplary mail order program, which has worked for years, as an opportunity, again
05:53going back to this concept of how do we deliver better care and where possible
05:58do it more efficiently. There's a real opportunity for this committee in
06:02partnership with the appropriate VA Oversight Committees to direct the
06:06comparison of the two systems and then bring back recommendations for the best
06:09practices between the two. Pharmaceuticals are growing in cost and
06:14that is not going to change. But this is an area in which the Veterans Health
06:18Administration actually has done this well for years with high patient
06:21satisfaction and, more importantly, the patients get the meds they need when
06:25they need them. There's a real opportunity to learn from the VA here.
06:30Thank you very much. Thank you, Senator Warren.