Blackburn Presses CVS on Driving Up Health Care Costs and Forcing Taxpayers to Fund Fraud

WASHINGTON, D.C. - Today, U.S. Senator Marsha Blackburn (R-Tenn.) sent a letter CVS Health CEO David Joyner, pressing him on the company's lengthy record of fraud and regulatory violations at taxpayers' expense and the role the company has played in driving up health care costs. Pharmacy benefit managers (PBMs), such as CVS Caremark, wield extraordinary power over which drugs are covered by insurance and where patients can fill prescriptions.

Senator Blackburn has led the charge to rein in PBMs by introducing the Patients Before Middlemen (PBM) act earlier this year. This legislation would bring down the cost of prescription drugs by delinking the compensation of pharmacy benefit managers (PBMs) from drug price and utilization.

Taxpayers Have Funded Fraud, Overbilling, Unsafe Practices, and Regulatory Violations at CVS

"President Trump has, rightfully, called for ending the massive taxpayer subsidization of big health insurance companies. CVS is the largest, most vertically integrated company in healthcare, and the federal government has quickly become CVS's largest funder. CVS Health, the fifth largest company in the United States by revenue, owns the second-largest pharmacy benefit manager (Caremark), the largest retail pharmacy chain (CVS), and the third-largest health insurer (Aetna), as well as other subsidiaries that extend into drug manufacturing and rebate aggregation. This vertical integration has not led to lower drug prices, but rather consolidated power that has enabled a lengthy record of fraud, overbilling, unsafe practices, and regulatory violations across the company, all subsidized by significant taxpayer funding. CVS itself acknowledges that programs funded by the U.S. government account for a 'significant' and growing share of its revenues… In 2024 alone, the federal government spent approximately $89.48 billion directly on CVS."

CVS Drives Up Costs by Steering Patients to CVS-Owned Pharmacies Instead of Community Pharmacies

"As one of the largest PBMs in the United States, CVS Caremark wields extraordinary control over which drugs are covered and where patients can fill prescriptions, whether those patients are insured by Aetna or by other plans. The Federal Trade Commission (FTC) has accused Caremark of inflating insulin prices by excluding cheaper competitors, while state attorneys general have sued over reimbursement schemes that underpay independent pharmacies. By steering patients toward CVS-owned pharmacies, CVS drives up costs and eliminates competition, undermining widely bipartisan goals of increasing transparency and reducing middlemen-driven price inflation in the prescription drug market. CVS retains the power to under-reimburse independent and community pharmacies while giving preferential treatment to the more than 9,000 CVS-owned pharmacies. As CVS has consolidated market power, it has given itself the ability to weaken competition and leave community pharmacies, insurers, and patients with no real alternatives to sustain themselves. As CVS itself notes, its market power is so much greater than that of its clients that losing U.S. federal government contracts is the only thing that could impact its operations."

CVS Refused to Provide Requested Information to Tennessee Auditors, Resulting in $750,000 in Fines

"It appears clear that CVS does not want its role in rising healthcare costs to be examined by lawmakers. Just this year, the Tennessee Department of Commerce and Insurance attempted to audit CVS Caremark for its compliance with Tennessee law and its dealings with pharmacies that serve Tennessee residents. Despite having the requested information available and despite requirements in Tennessee law that the information be provided to state auditors, Caremark instead spent months delaying and concealing the requested information. This eventually resulted in three separate orders against Caremark, each levying $250,000 in fines for failure to provide auditors with information to review Caremark's dealings."

Click here to read the full letter.

RELATED

• Blackburn, Hassan, Colleagues Introduce the "Patients Before Middlemen Act" to Bring Down Cost of Prescription Drugs