Medications Cost Less Through VA Than Medicare Drug Benefit
Prices in Medicare Part D prescription drug plans are on average 58% more for the most commonly prescribed medications than prices paid by the U.S. Department of Veteran Affairs, according to a study released Tuesday by Families USA, the Arizona Daily Star reports (Arizona Daily Star, 1/10).
The study used data submitted in November 2006 by the five health plans with the highest Part D enrollment figures. The prices represent charges that would be paid in full by Medicare beneficiaries in the so-called "doughnut hole" coverage gap.
Researchers considered Part D and VA prices for the top 20 drugs prescribed to seniors (Lade, South Florida Sun-Sentinel, 1/10). The study found that the VA was able to use its purchasing power to negotiate for lower drug prices.
Under the 2003 Medicare law, Medicare does not have the right to negotiate with drug companies. All 20 drugs cost more under Medicare Part D than under VA programs (Arizona Daily Star, 1/10). The differences in price ranged from 34% higher for the bloodthinner Plavix to as much as 10 times higher for the statin Zocor.
Families USA Executive Director Ron Pollack in a statement said, "These high prices devastate seniors who need to take multiple medicines," adding, "They are also a rip-off of American taxpayers" (South Florida Sun-Sentinel, 1/10).
The report also "challenged assertions" that pharmaceutical companies need Medicare's revenue to fund research and development, according to the Detroit Free Press. The report suggested that drug companies could shift money from marketing, advertising and administration -- which consumes 32% of the top seven companies' budgets -- to research and development, which takes up 13.9% of revenue, according to 2005 filings with the Securities and Exchange Commission.
"The industry could absorb a reduction in revenues resulting from negotiations with Medicare without paring back R&D spending," the report stated (Anstett, Detroit Free Press, 1/10).
The study is available online. Note: You will need Adobe Acrobat Reader to view the study.