Medicare Will Negotiate the Costs of Ten Pharmaceuticals. Whoopie!
Fact: the Veterans Administration Already Negotiates Prices on 399 drugs – and Pays 54% Less Than Medicare
“(T)hanks to the Inflation Reduction Act, Medicare can directly negotiate prescription drug prices to get a better deal for seniors. … Medicare has for the first time selected 10 drugs for negotiation….(with) prices going into effect in 2026.” (1)
Hooray (I suppose).
Guess what?
This is not a new idea.
The federal government already negotiates drug prices. Lots of drug prices.
According to a 2021 study by the Government Accountability Office (GAO), “...the Department of Veterans Affairs (VA) paid, on average, 54 percent less per unit for a sample of 399 brand-name and generic prescription drugs in 2017 as did Medicare…” (2)
Think about that. 399 drugs – not just ten. Those 399 drugs cost 54% less.
And we don’t have to wait until the year 2026.
GAO adds: “(Medicare and the VA) pay for drugs differently. Medicare reimburses the Part D plan sponsors to pay pharmacies, but the VA buys drugs directly from manufacturers. The VA may be able to get lower prices because it can...(n)egotiate as a single health system with a unified list of covered drugs (and u)se discounts defined by law that Medicare doesn't have…” (2)
The question is obvious: why can’t Medicare obtain drugs the same way that the VA does?
I think that all of us know the answer.
Footnotes:
(2) https://www.gao.gov/products/gao-21-111
Background:
“The U.S. Government Accountability Office is an independent, nonpartisan government agency within the legislative branch that provides auditing, evaluative, and investigative services for the United States Congress.” www.gao.gov