VA, Canadian Pharmacies Will Offer Lower Prices Than Medicare Drug Benefit, Democratic Report Says

The Medicare prescription drug benefit does not offer medications at the lower prices available through the Department of Veterans Affairs, Canadian pharmacies or high-volume U.S. pharmacies, according to a report by the Democratic staff of the House Government Reform Committee, the Washington Post reports. The report, requested by Rep. Henry Waxman (D-Calif.), looks at the average prices of 10 popular drugs offered to Medicare beneficiaries through 10 "well-known insurance plans," the Post reports.

The report then compares those prices with the average prices offered to VA beneficiaries, Canadian consumers and customers at major pharmacies such as Costco or Drugstore.com. The average Medicare prices were 80% higher than VA prices, 60% higher than Canadian average prices and 3% higher than prices at major U.S. pharmacies.

The report states, "The prices offered by the Medicare drug plans are higher than all four benchmarks, in some cases significantly so. This increases costs to seniors and federal taxpayers and makes it doubtful that the complicated design of Medicare Part D provides any tangible benefit to anyone but drug manufacturers and insurers."

According to the Post, the report resulted from a disagreement among some Republicans and Democrats over how to obtain the lowest drug prices. Some Democrats maintained that lower prices would come from allowing the federal government to negotiate prices directly with drug companies, while many Republicans stated that lower prices would come from competition among drug plans.

CMS spokesperson Gary Karr said the report is "selective and misleading" and did not consider prices for generic medications, which generally are less expensive. He added, "The question really is whether this is indeed a true and accurate reflection of the plan choices that somebody would have if they pumped these drugs into the Medicare plan finder" (Lee, Washington Post, 11/23).

Additional information about the Medicare drug benefit also is available online.