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Sen. Marsha Blackburn (R-Tenn.), a member of the Senate Finance Committee, sent a letter to David Joyner, CEO of CVS Health, asking for answers on "the company's lengthy record of fraud and regulatory violations" as well as the "role the company has played in driving up healthcare costs." Blackburn accused CVS of increasing health insurance premiums, which, in turn, have increased federal government spending on Affordable Care Act (ACA) premium subsidies when individuals purchase insurance through an ACA public exchange. For instance, Blackburn stated in her letter that federal dollars accounted for 24% of CVS's total revenue, or about $89.48 billion, in 2024. Payments from the federal government to CVS increased by 18% from 2022 to 2024, accounting for more than 60% of CVS's revenue growth.
Furthermore, Blackburn criticized Caremark, a CVS-owned PBM, and other PBMs for failing to provide fair reimbursement to independent pharmacies in her home state of Tennessee. Blackburn views Caremark's shortchanging of independent pharmacies as an attempt to push patients to use CVS pharmacies. This outcome has led to decreased revenue and the closure of independent pharmacies, which disproportionately serve rural areas. CVS has also drawn criticism about practices that its insurance subsidiary, Aetna, has used to increase healthcare costs.
Dissatisfaction over pharmacy benefits managers (PBMs), such as CVS-operated Caremark, heightened during a House Rules Meeting on a currently pending House bill that would extend current ACA premium subsidy levels. The House parliamentarian reportedly stripped some language regulating PBMs from pending legislation, prompting Republican House members to complain about the need to rein in insurers' PBMs and lower drug costs. One House member went as far as to say that he believed the Federal Trade Commission (FTC) already had the power to ban insurers from owning PBMs.
Employers and benefits advisors largely support congressional efforts to decrease the power of giant health insurance companies and pharmacy benefit managers (PBMs). However, they still want the benefit of effective strategies that hold down prescription drug costs for plan participants.
These conflicts between insurance companies, PBMs, pharmacies, and drug manufacturers are likely to impact pending federal legislation. On the one hand, a coalition of House Democrats and Republicans has introduced the CommonGround for Affordable Health Care Act, which would temporarily extend current subsidies. In response, the GOP is championing the Lower Health Care Premiums for All Act bill, which would strengthen PBM prescription drug cost disclosures to plan sponsors, promote small employers joining association health plans to purchase more affordable coverage, and encourage individual coverage health reimbursement arrangement (ICHRA) plans.
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