Feds Negotiate Lower Drug Prices Than Private Sector
27 September 2005As implementation of the new Medicare prescription drug program draws near, both conservatives and liberals in Washington are fretting over the potential cost of the program. To deal with this problem, congressional architects of the Medicare Modernization Act (MMA) created a program in which private companies would negotiate directly with drug companies to obtain discounts and pass them on to consumers—while barring the government from doing the same. Now that the first phase of the program—a temporary discount card program that began in June 2004 and ends next January—has been in effect for over a year, it’s time to ask a question crucial to the program’s future: how successful has this approach been?
To answer this question, Families USA has today released a new report, titled Getting the Best Price: Lessons Learned from the Medicare Discount Card Program. In this report, we compared Medicare discount card prices for the 50 drugs most frequently used by seniors with the prices the Department of Veterans Affairs (VA), one of the government’s largest prescription drug purchasers, negotiates for those same drugs. The result: For the 50 drugs most frequently prescribed to seniors, the lowest Medicare discount card price was almost always considerably higher than the lowest price negotiated by the VA. In fact, for half of the top 50 drugs prescribed to seniors, the purchase price with a discount card was at least 58.2 percent higher than for those same drugs purchased through the VA.
This report clearly shows that if Congress wants to deliver affordable prescription drugs to America’s seniors while keeping the cost of the program from spiraling out of control, it needs to give the government the power to negotiate directly with the drug companies. As Ron Pollack, our Executive Director, said recently, “The continued prohibition against such bargaining will not only hurt seniors, but it will also fleece the American taxpayer.â€
Source: FamiliesUSA