Lawmakers examine Express Scripts as its contract nears renewal

WASHINGTON — Micah Lansford, the pharmacist-owner of a drugstore in New Mexico that serves the military community of Cannon Air Force Base, told lawmakers this week that he was forced to leave the Tricare pharmacy program because of contract terms that would cause him to lose money on every prescription he filled.

Lansford, whose family has operated Roden-Smith Pharmacy in Clovis since 1948, said he opted to leave the program in 2023 after determining that the terms of a new contract would have resulted in an average loss of $9 on each medication order.

Based on the volume of prescription orders coming into the independently owned pharmacy, Lansford estimated he would lose $60,000 per year.

“We were pushed out of the system by contract terms that made a difficult situation impossible,” Lansford told the Senate Armed Services Personnel Subcommittee at a hearing on Wednesday that examined the Tricare pharmacy program.

Express Scripts is the exclusive administrator of the Tricare pharmacy program and operates mail-order pharmacy services.

Chairman Sen. Tommy Tuberville, R-Ala., delivers remarks during a Senate Armed Services subcommittee hearing on July 15, 2026, in Washington. (Eric Kayne/Stars and Stripes)

“We cannot expect service members to maintain peak readiness if they cannot reliably access the medications they need,” said Sen. Tommy Tuberville, R.-Ala., the subcommittee chairman. “We need to strike the right balance between controlling costs and ensuring access.”

The purpose of the hearing was to look at the exodus of more than 13,000 independent drug stores from the pharmacy program and the impact of reduced access for consumers.

Because of lower reimbursement rates, many independently owned pharmacies cannot afford to continue in the Tricare program, according to the National Community Pharmacists Association.

“Prescription care should not be a loss leader. No pharmacy should be required to perform a contract where it loses,” Lansford said at the hearing.

Ranking member Sen. Elizabeth Warren, D-Mass., delivers remarks during a Senate Armed Services subcommittee hearing on July 15, 2026, in Washington. (Eric Kayne/Stars and Stripes)

Sen. Elizabeth Warren, D.-Mass., the subcommittee’s top Democrat, questioned Express Scripts’ dual role as pharmacy benefit manager and owner of two mail-order pharmacies — Express Scripts Pharmacy and Accredo Specialty Pharmacy.

“Why on earth is DOD requiring vertical integration so that the very company that’s supposed to be doing the managing also owns [the] pharmacy … [and is] in some of the cases charging both our service members more and charging our federal government more?” Warren said.

She suggested that Express Scripts is pushing local pharmacies out of the Tricare network and steering business to itself.

Lansford described Express Scripts as acting as both referee and competitor.

Warren recently secured an amendment to the 2027 National Defense Authorization Act directing the Government Accountability Office to audit the pharmacy program annually, according to her office.

The audit will examine how Express Scripts operates its own mail-order pharmacies while functioning as the manager of the program itself — reimbursing its own pharmacies and the competition.

The contract with Express Scripts to manage the Tricare pharmacy program is set to expire in December 2029, which would allow the military to negotiate a more favorable agreement, Warren said.

“The Tricare pharmacy program lacks meaningful oversight,” Warren said.

David Smith, a retired Navy rear admiral and deputy director of the Defense Health Agency, testifies during a Senate Armed Services subcommittee hearing on July 15, 2026, in Washington. (Eric Kayne/Stars and Stripes)

David Smith, a retired Navy rear admiral and deputy director of the Defense Health Agency, said it was “reasonable” for the Defense Department to look at changing the structure of its contract with Express Scripts.

The military signed the contract with Express Scripts in 2021. Under the agreement, the company acts as pharmacy benefit manager, handling retail networks, mail-order delivery and specialty pharmacy services.

Warren and other lawmakers argued the Pentagon has an opportunity to negotiate better terms and address conflicts of interest.

“Taxpayers deserve to know that [government funds] are being used for their intended purpose, not for potential self-dealing by [Defense Health Agency] contractors,” Warren said.

The Defense Department said that Tricare’s pharmacy program offers at least one in-network retail pharmacy within a 15-minute drive for more than 98% of beneficiaries.

“The department is effectively managing this important health benefit that helps support force readiness, recruitment, retention and the health of our service members and their families,” Smith said.

But Warren complained that the Defense Department has declined to disclose the terms of the contract with Express Scripts, stating that it would reveal proprietary information.

Warren presented a Defense Department report that found that it cost the military 12.5% more, on average, to dispense a 30-day supply of generic drugs through the Express Scripts mail-order pharmacy than at retail pharmacies.

Warren also wrote to Assistant Secretary of Defense for Health Affairs Keith Bass in June, urging him to release data that would allow Congress to better evaluate the performance of Express Scripts.

Pharmaceutical spending represents one of the fastest-growing components of the Defense Department’s health expenditures, Smith said.

Savings are achieved through negotiated discounts for prescription drugs, Smith said.

The Defense Department controls pricing while Express Scripts provides administrative services under the contract, Smith said.

“Continued growth in specialty pharmaceuticals, biologics and chronic disease therapies will require ongoing efforts to preserve affordability while maintaining high-quality care for beneficiaries,” he said.