Managed Care


For drugs, the VA pays far less than Medicare

MANAGED CARE February 2006. © MediMedia USA
The Formulary Files

For drugs, the VA pays far less than Medicare

MANAGED CARE February 2006. ©MediMedia USA


A recent survey indicates that prices for the top 20 drugs used by Medicare enrollees are much higher than prices negotiated by the Department of Veterans Affairs. According to the report "Falling Short: Medicare Prescription Drug Plans Offer Meager Savings" from Families USA, the median difference for those top 20 drugs is 48.2 percent.

Only drugs that were on a Medicare prescription drug plan's formulary — drugs for which the plan would have actively negotiated prices — were included in the analysis.

The survey ruffled feathers at the Pharmaceutical Care Management Association, whose own survey finds that PBMs are negotiating deep discounts in Medicare. PCMA says it will save Medicare beneficiaries an average of 31 percent at retail pharmacies and 45 percent through mail-service pharmacies, compared to the customary prices that retail pharmacies charge. In itself, this statement does not contradict the Families USA study.

PCMA contends that a VA-style approach to Medicare drug pricing would lead to higher costs for working families, unions, and small businesses and limit Medicare enrollees' access to covered drugs and pharmacies. According to PCMA, the VA drug program is not comparable because it is highly restrictive and provides access to only about 250 pharmacies nationwide, compared to 55,000 pharmacies under Medicare Part D.

To obtain the Families USA study, go to «». For the PCMA study, go to « %20Choices%20(12-21-05).pdf».

Source: Families USA, Falling Short: Medicare Prescription Drug Plans Offer Meager Savings.PBMs discounts on top drugs used by Medicare enrolleesPDP=Prescription Drug Plan

Source: PCMA, Higher Costs, Fewer Choices: What Families USA's New Report on Medicare Drug Prices Isn't Telling America's Seniors & Disabled.


Pharmaceutical Pricing and Contracting Conference Philadelphia, PA September 22–23, 2014
Private Health Insurance Exchanges Conference Washington, D.C. October 7–8, 2014
National Healthcare Facility Management Summit Palm Beach, FL October 16–17, 2014
National Healthcare CFO Summit Las Vegas, NV October 19–21, 2014
National Healthcare CXO Summit Las Vegas, NV October 19–21, 2014
Innovative Member Engagement Operations For Health Plans Las Vegas, NV October 20–21, 2014
4th Partnering With ACOs Summit Los Angeles, CA October 27–28, 2014
2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014