HHS' Office of Inspector General will investigate the impact of vertically integrated Medicare Part D plans and pharmacy benefit managers on drug prices.
In a notice posted in April on its website, the OIG said it will "determine the impact of related entity transactions within select vertically integrated entities on the prices for covered Part D drugs."
"Concern has been raised about the vertically integrated model," the OIG wrote. "One such concern is that, by owning many links in the chain, a vertically integrated Medicare Part D sponsor may inflate drug prices."
In November, U.S. Sens. Elizabeth Warren and Mike Braun wrote to the OIG, asking the watchdog to investigate the link between vertically-integrated insurers and pharmaceutical benefit managers. The senators wrote they were concerned insurers use their integrated PBMs to skirt federal laws requiring them to spend 80% to 85% of their premium dollars on medical care.
CVS Health, Cigna and UnitedHealth Group operate the three largest PBMs in the U.S. In their letter, the senators cited a Wall Street Journal report that found CVS Health and Cigna charged at least 24 times more in their Medicare Part D formularies for certain generic drugs than Mark Cuban's Cost Plus Drugs Co. UnitedHealth charged at least 3.5 times more, according to the Journal.
The OIG plans to complete its audit by 2026, according to its website.