Congress

Lawmakers press DoD to commit to TRICARE pharmacy contract annual audits

"DoD can't continue to ignore this conflict of interest that arises when a company owns both a PBM and a pharmacy. That has got to stop," Elizabeth Warren said.

Anastasia Obis

May 21, 2026 6:39 pm

3 min read

As the Defense Department begins planning for the next-generation TRICARE pharmacy contract, which would succeed the current agreement currently administered by Express Scripts, lawmakers say the Pentagon cannot continue to ignore what they describe as a major conflict of interest where Express Scripts both acts as a pharmacy benefit manager (PBM) and operates its own pharmacies.

In the meantime, existing contracts should be “regularly audited and subjected to much greater transparency to try to beat this kind of conflict out of the system,” Sen. Elizabeth Warren (D-Mass.) said during a Senate Armed Services Committee hearing on military personnel policy on Wednesday.

Express Scripts has been administering TRICARE pharmacy benefits since 2003. In 2021, it was awarded an eight-year contract worth up to $4.3 billion.

As TRICARE’s pharmacy benefit manager, Express Scripts decides which pharmacies can participate in the Tricare network and negotiate reimbursement rates. The company, however, also operates its own mail-order and specialty pharmacies that participate in the network, putting it in direct competition with other pharmacies.

“That means that Express Scripts both provides pharmacy services to Tricare members directly and sets the reimbursement rates for itself and all of its competitors,” Warren said.

“That gives Express Scripts an incentive to under reimburse all of the competing pharmacies and inflate its own payments,” she added.

In 2022, after Express Scripts proposed drastically reduced reimbursement rates, approximately 15,000 independent and community pharmacies — most in underserved rural and urban areas — left the TRICARE network. Warren also said generic drugs dispensed through Express Scripts-owned pharmacies reportedly cost the Defense Department $484 more on average.

“I am concerned that we’ve got a pharmacy benefit manager here who competes with a bunch of America’s pharmacies, and it’s the one that is doing the pricing, and it’s the one that’s deciding who else the competition will be. That seems like to me a perfect way to be able to advantage yourself, disadvantage everyone else,” she said.

Assistant Secretary of Defense for Health Affairs Keith Bass argued that the Tricare pharmacy program operates differently from commercial PBM models since the Defense Department controls pricing while Express Scripts provides administrative services under the contract.

“It does claims, mail-order pharmacy and is paid a fixed fee for each of the prescriptions. The Department of War controls their pricing and retains the cost savings,” Bass told the Senate Armed Services Committee.

Warren said the arrangement creates incentives for Express Scripts to favor its own pharmacies over independent competitors.

“How do you explain 13,000 pharmacies actually leaving the whole system and just saying, ‘You won’t even pay me enough to make it worthwhile?’” Warren said.

Bass said the contractor is “meeting its contractual requirements.”

“What we’re talking about here is a blatant conflict of interest. For years now I’ve been calling for more transparency to ensure that Express Scripts isn’t favoring itself and its own subsidiaries and under reimbursing the independent pharmacies in the hopes that it can drive them out of the Tricare business altogether, and just have more of the business for themselves. I have been met with obstruction every step of the way from our own Department of Defense,” Warren said.

Congress has long scrutinized PBMs. In 2024, the Office of Personnel Management inspector general found that Express Scripts overcharged the American Postal Workers Union Health Plan and the federal government by roughly $45 million. Meanwhile, the Government Accountability Office identified “persistent inconsistencies” in data Express Scripts provided to the Defense Department that the Pentagon failed to catch during its own validation process, Warren said.

Warren pressed Bass to commit to annual audits of the TRICARE pharmacy contract. Bass said the Defense Department would provide Congress with the full audits — not just summaries of the findings.

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