Chart of the Week: Lowering Medicare Drug Prices
The U.S. could save billions of dollars a year if Medicare were empowered to negotiate drug prices directly with pharmaceutical companies, according to a paper published by JAMA Internal Medicine earlier this week. Researchers compared the prices of the top 50 oral drugs in Medicare Part D to the prices for the same drugs at the Department of Veterans Affairs, which negotiates its own prices and uses a national formulary. They found that Medicare’s total spending was much higher than it would have been with VA pricing.
In 2016, for example, Medicare Part D spent $32.5 billion on the top 50 drugs but would have spent $18 billion if VA prices were in effect – or roughly 45 percent less. And the savings would likely be larger still, Axios’s Bob Herman said, since the study did not consider high-cost injectable drugs such as insulin.
