In a new report comparing Medicare Part D prescription drug prices to Veterans Affairs prices, the Government Accountability Office finds that Medicare pays more than twice as much as the VA for drugs.
The GAO looked at 2017 prices for 399 of the most frequently used and most expensive drugs. It found that the VA pays half of what Medicare Part D plans pay for more than 200 drugs. The VA pays 75 percent less or a quarter of what Medicare Part D pays for 106 of these drugs. Medicare Part D only pays less than the VA for 43 drugs.
The GAO analyzed prices for both brand-name and generic drugs. It posited that the VA achieves better prices because it bargains on behalf of a large population. The Part D insurers do not bargain collectively for lower drug prices as they do, for example, in Germany.
The VA achieved savings of 68 percent over Medicare drug prices for the 203 generic drugs studied. Savings for 196 brand-name drugs was 49 percent or an average of $4.11 per drug.
The dollars add up. Together the VA and the Part D plans spend $105 billion a year on drugs. They cover 52 million people. And, they represent about one-third of all prescription drug spending.
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As a nurse , having worked at VA and in multipayer system ( gov and private payer), the reason VA pays less than Medicare for drugs is because Medicare pays for drugs PLUS cost of dispensing them.
VA doesn’t. At least , not at purchasing point with manufacturers
VA salaries pay for people to dispense drugs. That is not paid at point of purchasing meds
Multipayer pharmacies , Dr offices, hospitals, etc get reimbursed by Medicare for operation costs ( part anyway, the smaller part). In that reimbursement are costs to pay to help run these entities and pay salaries
So, at point of purchase, VA drugs will always be less expensive ,and Medicare costs more expensive. Unless gov doesn’t want to pay costs to help run pharmacies, hospitals, etc. But the private side already pays 66 to 80% of costs to run these things
BTW, a gov GAO report also said Medicare pays for drug costs PLUS dispensing costs.