VA negotiates better prescription drug deals than Medicare

By Michael Posner

December 21, 2005

Prices for the most commonly used prescription drugs will be significantly higher under the new Medicare drug plan than comparable prices under the Veterans Affairs drug plan, according to a study by FamiliesUSA.

The survey by the consumer health group said the annual costs of the 20 drugs most used by seniors under the Medicare program will exceed VA prices by as much as 689 percent -- or $1,156 -- for 20 mg of the cholesterol drug Zocor. The survey showed that half of the top 20 drugs exceeded the lowest VA prices by 48.2 percent, or $261.

Among the 20 most prescribed drugs all but one of the prices under the Medicare plan -- the heartburn pill Nexium -- was significantly higher than the VA's. The Nexium price per year was nearly 14 percent lower than the VA, or $132.

As part of the Medicare prescription drug law, Congress barred Medicare officials from negotiating with pharmaceutical companies. The VA, by contrast, leverages its position as a large-scale purchaser of drugs to lower overall prices for veterans' drugs.

The study compared recent prices in two Medicare regions, one covering the Washington, D.C., Maryland and Delaware, and one covering Ohio.

"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," said FamiliesUSA Executive Director Ron Pollack, at a news conference.

Since the government covers about three-fourths of the drug costs, Pollack said the "bottom line" is "millions of seniors will be burdened with unaffordable costs and the American taxpayers will be fleeced."

Separately, the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, criticized the study, saying seniors will save an average of 31 percent on drugs bought at retail pharmacies and 45 percent by mail order.

FamiliesUSA said the drug program was promoted on the basis that competition among drug companies would lower medication prices. "On the promise of low drug prices, the program fails," the study said. The Medicare drug plan goes into effect in January for Medicare recipients who signed up for the program.


By Michael Posner

December 21, 2005

http://www.govexec.com/federal-news/2005/12/va-negotiates-better-prescription-drug-deals-than-medicare/20864/