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PUTT Blog | The GAO's PBM Payment Report Needs Actual Accountability

13 minutes ago
5 min read

Congress asked the Government Accountability Office (GAO) to examine how Medicare Part D sponsors that own PBMs and pharmacies pay their own pharmacies compared with competing pharmacies. The GAO's answer is that PBM-owned pharmacies were paid less than competitors for most drugs in 2023. 


That answer can't be relied on, and anyone in the industry can tell you it is, at best, incomplete and misleading.


The GAO left out the DIR fees PBMs clawed back afterward, in the very year those fees peaked to an all time high. It also counted copays the PBM sets as "payments." And every number it used came from the PBMs and their parent companies, with none checked against a single competing pharmacy's records. 


Because of these obviously monumental payment omissions, the report can't do what it was meant to do: show how PBMs pay their own pharmacies compared with their competitors.

If you use an actual pharmacy’s DIR data from 2023, it flips the entire report on its head. An independent Texas pharmacy was paid $1,943,789 in 2023 by the PBMs that charged it DIR fees, and lost $251,440 (12.9%) of those payments to DIR: 


  • 17.7% to Express Scripts, 

  • 15.9% to Caremark, 

  • 13.6% to SS&C and, 

  • 7.9% to OptumRx. 


The GAO reported that pharmacies paid back a net 7% to the four sponsors it studied, but said it couldn't tell how that percentage split between PBM-owned pharmacies and competitors. The 7% only makes sense if the PBM pharmacies paid 0% and competitors paid 9.2%. 


The GAO's reported payment gaps are mostly "up to 10 percent" or less in the report. A clawback from a PBM's own pharmacy stays inside the same company, while a clawback from an independent pharmacy leaves the pharmacy’s bank account. Assume the PBM's own pharmacies bore no real DIR fees because the fees were paid to themselves. Then every GAO gap smaller than 12.9% reverses: 


  • "5% lower" becomes 9.1% more kept by the PBM's pharmacy and, 

  • "10% lower" becomes 3.4% more. 


Even if PBM-owned pharmacies paid the GAO's reported 7% average, it gaps up to about a 6.4% reverse. This is only one pharmacy's experience, not a national estimate, but it shows that the GAO's conclusion would be completely different based on the numbers it left out.


The biggest issue with the report is that no one verified the data outside the PBMs’ reporting; which is as far as you can get from accountable. Come on, Government Accountability Office, at least make an effort! 


The GAO's payments come from Part D claims that plan sponsors and their PBMs submit to CMS. Its DIR total comes from the sponsors' own summary reports. How much of the market the report’s 36 contracts represented, and which pharmacies the sponsors own, were "confirmed… with plan sponsor representatives." The report credits only "CMS officials" and "plan sponsor representatives." It names no independent pharmacy, PSAO or pharmacy association as a source, and the GAO's reliability checks looked only for missing data and errors. 


The GAO says pharmacy-level DIR fees "were not available," but that data exists in three places the GAO didn't ask for it from:


  • Every pharmacy receives DIR statements from each PBM, 

  • PSAOs, which contract with PBMs for thousands of independents, hold it in aggregate for each PBM and, 

  • The PBMs themselves calculate and collect it. You could even subpoena any pharmacy claims reconciliation service for the info. 


The accurate wording is not "unavailable" but “never requested.” An accountability office should have never published a report making statements like “payments to pharmacies were generally lower at owned pharmacies.”


The most obvious issue with the report is the source, as vertically integrated PBMs have already been caught falsifying the exact data the GAO used and did not verify in their report. 


In August 2025 a federal court in U.S. ex rel. Behnke v. CVS Caremark ordered Caremark to pay $289.9 million for misreporting what it paid pharmacies on Medicare Part D claims; causing Medicare to overpay by about $95 million. The data that was misreported was the way the PBM prices the claim and the plan submits it to CMS (the same kind of data the GAO used). The misreporting went undetected by routine data checks for more than a decade, until an insider and a trial exposed it. Caremark has said it will appeal. 

If only there was an accountability office to hold their data accountable. 


The GAO's conclusions also conflict with the Federal Trade Commission's (FTC) conclusions. Using the PBMs' own data, the FTC found PBM-affiliated pharmacies "reimbursed at a higher rate than unaffiliated pharmacies on nearly every specialty generic drug examined," earning $7.3 billion above acquisition cost - $1.4 billion of it from Part D. Even the GAO's own appendix found PBM-owned pharmacies paid more on about half of the 20 costliest drugs, with patients' cost sharing up to $340 higher there. 


PBMs set what both their own pharmacies and their competitors are paid, as well as what patients' copays are. The PBM could do the following and show a lower ‘payment to pharmacy’: $0 copay, $9 plan payment at a PBM pharmacy versus a $10 copay, $0 plan payment at a competitor. 


Sure that shows a higher ‘pharmacy payment’ at a competitor, because you control what the patients and the plan pay for every prescription. If you’re a patient and you see a $0 copay at a PBM-owned pharmacy versus a $10 copay at a local pharmacy, the choice probably isn’t hard to make. Which leads us to what this GAO report can ACTUALLY be used for.


The GAO report should be used to show that the PBMs’ sworn testimony to Congress is easily contradicted by federal findings. 


Texas has defined the term ‘steering’ in law. Texas Insurance Code bars a PBM from any plan that "requires or induces a patient to use the issuer's or manager's affiliated provider, including by providing for reduced cost-sharing if the patient uses the affiliated provider." 

The GAO found patient cost sharing lower at PBM-owned pharmacies for at least 98% of the 100 most-used Part D drugs, and wrote that "lower cost sharing at plan sponsors' own pharmacies is one way for plan sponsors to steer beneficiaries to these pharmacies." It also describes sponsors naming their own pharmacies "preferred" and sending "targeted mailings." 


Under Texas's definition, that is steering. (Part D itself is governed by federal law, which is why Congress needs a federal ban like Texas's.)


On July 23, 2024, the presidents of the three largest PBMs testified under oath before the House Oversight Committee that they don't steer. On August 28, 2024, Chairman James Comer wrote to all three PBMs, citing the federal false-statements and perjury statutes, and asked them to correct the record by September 11, 2024. 


The GAO doesn't name the four sponsors it studied, but the report’s findings give Congress federal evidence, drawn from the industry's own data, that the steering the executives denied is happening. 


Congress should use this report for that purpose, and set it aside as a measure of PBM payments until the report’s data is verified at the claim level against pharmacies' own records. Let’s use the GAO report to actually hold someone accountable.



Sources

    Independent Texas pharmacy: ReconRx 2023 year-end reconciled claims summary and DIR tracking records (provided by the pharmacy)

    U.S. ex rel. Behnke v. CVS Caremark Corp., No. 2:14-cv-00824 (E.D. Pa.): opinion on the claims; judgment coverage from Duane Morris and Pharmaceutical Commerce (Aug. 2025)

    House Committee on Oversight and Accountability, "Chairman Comer Calls on PBM Executives to Correct Hearing Testimony" (Aug. 28, 2024), with letters to David Joyner, Adam Kautzner and Patrick Conway

   Texas Legislature, HB 1919, 87(R), enrolled text; Texas Insurance Code §§1369.551–.555


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