GPO Paper Trail: The Audit That Found $15.8 Million. Who Kept It?
A federal audit of postal workers' pharmacy benefits caught pharmacy benefit manager (PBM) Express Scripts and its affiliated GPO withholding millions in prescription drug rebates. Here is how it happened.
An auditor at the U.S. Office of Personnel Management (OPM) followed the paper trail through a government health plan for federal workers, all the way to a Swiss-based group purchasing organization (GPO) entity called Ascent Health Services. The OPM Office of Inspector General (OIG) audit of Express Scripts' administration of the American Postal Workers Union Health Plan, covering contract years 2016 through 2021, identified $44.8 million in total overcharges across six findings, including:
Retail pharmacy discounts that were never passed through
Drug purchasing discounts that were quietly retained
Lost investment income
How did it happen? After Express Scripts launched Ascent in 2019, all rebate administration was switched over to the GPO. Express Scripts and Ascent negotiated lower internal rebate percentages, allowing Ascent to keep the difference.
Express Scripts did not admit wrongdoing. Its parent company, Cigna's, formal response to the audit argued that Ascent should not be characterized as a sister company, and that contractual interpretations varied. But faced with the audit finding, Express Scripts voluntarily credited the $14.4 million back to the health plan rather than contest the OIG's position.
This was just one health plan covering one group of federal workers for six years – and the PBM was willing to shortchange the federal government directly.
The OIG found the money this time. The same GPO structure, however, operates across hundreds of plan sponsors nationwide, most of them without an Inspector General watching. A major, concerning question remains: how much is still sitting overseas?
The paper trail is growing, and so are the profits of major insurer conglomerates hiding behind it.
Read GPO Paper Trail: The Contract You Can't Read Because It's Overseas and understand more about GPOs and how they function here.