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Research Letter
January 14, 2019

Assessment of Spending in Medicare Part D If Medication Prices From the Department of Veterans Affairs Were Used

Author Affiliations
  • 1Department of Pharmacy, Veterans Affairs St Louis Health Care System, St Louis, Missouri
  • 2Department of Medicine, University of Washington School of Medicine, Seattle
  • 3Center for Health Equity Research and Promotion, Veterans Affairs Pittsburgh Healthcare System, Pittsburgh, Pennsylvania
  • 4Division of General Internal Medicine, Department of Medicine, University of Pittsburgh, Pittsburgh, Pennsylvania
JAMA Intern Med. 2019;179(3):431-433. doi:10.1001/jamainternmed.2018.5874

Several state and federal efforts to reduce prescription drug costs have proposed using the Department of Veterans Affairs (VA) as a model, given its ability to obtain deep discounts on medications through direct negotiation with pharmaceutical manufacturers and the use of a national formulary. Published studies using data from a decade ago estimated that Medicare Part D could save $14 billion to $22 billion annually if it paid prices similar to those paid by the VA,1-3 and a recent congressional report4 for 20 brand-name drugs estimated potential annual savings of $2 billion. However, none of these estimates used actual prices paid by the VA, which can be lower than published federal prices. Thus, we used the most recent national data available from Medicare and the VA to quantify the savings Medicare Part D would achieve if it paid the same prices for prescription drugs currently paid by the VA.

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