Medication Prices Under Medicare Prescription Drug Benefit Higher Than Department of Veterans Affairs Prices
Prescription drug prices under the new Medicare drug benefit are considerably higher than the prices negotiated by the Department of Veterans Affairs, according to a study by Families USA. The study found that the median price difference for a one-year supply of the 20 drugs most commonly prescribed to seniors is 48.2% (Families USA release, 12/21).
The VA plan negotiates prescription drug prices for its five million members, while the 2003 Medicare law prohibits the government from directly negotiating with drug makers to determine prices for the program's 43 million beneficiaries (Nohlgren , St. Petersburg Times, 12/22).
For the survey, Families USA analyzed recent prices of a one-year supply of 20 prescription drugs in plans offered in a Medicare region in Ohio and a region in Delaware, Maryland and Washington, D.C., and compared the prices with those in the VA drug plan (Posner, CongressDaily, 12/21). According to the survey, the lowest available Medicare plan drug price was higher than the lowest VA price for 19 of the 20 drugs studied (Tannenbaum, Bloomberg/Orange County Register, 12/22).
Acid reflux treatment Nexium was the only medication for which the VA price is higher than the Medicare price. The lowest available price for a one-year Nexium supply in a Medicare drug plan is $836.28, compared with $968.40 under the VA plan.
The survey also included the following examples:
- A one-year supply of the osteoporosis treatment Fosamax is $493.32 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $709.68;
- Acid reflux medication Protonix is $253.32 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $1,080; and
- Cholesterol-reducing medication Lipitor is $497.16 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $717.84 (Nohlgren , St. Petersburg Times, 12/22).
Families USA Executive Director Ron Pollack said, "The huge prices paid by seniors and taxpayers could have been avoided if Congress and the president had not caved in to the pressure of the drug lobby" (CongressDaily, 12/21).
David Lemmon of Families USA said, "People ought to ask themselves, 'Why do we have a plan set up to prevent a Medicare pool with 42 million beneficiaries negotiating a cheaper price?' In the end, that's what the pharmaceutical industry opposed for so long."
However, Medicare spokesperson Peter Ashkenaz said the study presents "a tired old ideological argument," adding that Families USA "wants government price controls and a one-size-fits-all benefit." Ashkenaz noted the VA plan limits drug choices and requires members to use VA pharmacies, while Medicare plans cover at least two medications from every major drug category and allow beneficiaries to fill prescriptions at retail drug stores. "For example, in Georgia there are nine VA pharmacies, compared to 1,833 local pharmacies," Ashkenaz said (Nohlgren , St. Petersburg Times, 12/22).
CMS spokesperson Gary Karr said the drug benefit "is a competitive system that's bringing lower prices and better coverage than anyone expected" (Bloomberg/Orange County Register, 12/22).
The report is available online. Note: You must have Adobe Acrobat Reader to view the report.
In related news, 57% of beneficiaries who have enrolled in a Medicare prescription plan say they think their efforts to sign up were worthwhile and would recommend the benefit to others, according to a telephone survey of 401 enrolled beneficiaries by America's Health Insurance Plans.
Sixteen percent of respondents said they thought the effort to enroll was not worthwhile. In addition, 82% of respondents said their plan would cover the drugs they need, while 7% said some of their drugs would not be covered. The survey also found that 28% of respondents used the Internet, either on their own or with assistance, while choosing a plan.
Karen Ignagni, president of AHIP, said, "Seniors are confirming that having a choice of drug plans works for them" (Nohlgren , St. Petersburg Times, 12/22).
Several broadcast programs reported on the Medicare prescription drug benefit:
- KCET's "Life & Times": The program on Thursday is scheduled to include a segment on how beneficiaries can choose from the more than 40 plans available in California and will include comments from a consumer advocate at the Foundation for Taxpayer and Consumer Rights (Guinyard, "Life & Times," KCET, 12/22). The complete transcript and audio of the program will be available online after the broadcast.
- NBC's "Nightly News": The segment includes comments from CMS Administrator Mark McClellan; Gail Siegel of the Educational Alliance; and Robert Zorowitz, chief medical officer at the Hebrew Home for the Aged (Bazell, "Nightly News," NBC, 12/21). The complete transcript and segment in Windows Media are available online.
- NPR's "Morning Edition": The segment reports on how some Medicare beneficiaries are relying on their adult children to assist them in registering for the benefit, including the experience of NPR health policy correspondent Julie Rovner helping her mother to enroll. The segment includes comments from Suzanne Jackson, director of the Health Insurance Counseling Project at George Washington University Law School, the designated Medicare insurance counseling program for Washington, D.C. (Rovner, "Morning Edition," NPR, 12/22). The complete segment is available online in RealPlayer.
- NPR's "Morning Edition": The segment examines the "next hurdle" for the government of ensuring that beneficiaries' medical information is entered into the Medicare database so pharmacists can access it when they fill prescriptions. The segment includes comments from Tom Clark, director of policy and advocacy at the American Society of Consultant Pharmacists; Ed Dillon, pharmacist at Grubb's Care Pharmacy; and McClellan (Silberner, "Morning Edition," NPR, 12/22). A transcript of the segment is available online. The complete segment is available online in RealPlayer.