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Research Letter
February 3, 2020

Estimation of Medicare Part D Spending on Insulin for Patients With Diabetes Using Negotiated Prices and a Defined Formulary

Author Affiliations
  • 1Program On Regulation, Therapeutics, And Law, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
  • 2Division of Pulmonary and Critical Care Medicine, Department of Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
  • 3Harvard Medical School, Boston, Massachusetts
  • 4US Department of Veteran Affairs, New England Healthcare System, Boston, Massachusetts
  • 5Harvard T. H. Chan School of Public Health, Boston, Massachusetts
JAMA Intern Med. Published online February 3, 2020. doi:10.1001/jamainternmed.2019.7018

The US Department of Veterans Affairs (VA), unlike Medicare Part D, receives a minimum discount for prescription drug purchases and additionally relies on price negotiation and a national formulary to limit outpatient drug spending. A 2019 study found that Medicare could have saved $14.4 billion in 2016 from an estimated $32.5 billion in spending if it used VA-negotiated prices for the 50 costliest Part D oral drugs.1 Inhaled and injectable products represented 16 of the 50 costliest drugs covered under Medicare Part D in 2016.2 Recently, our research group reported that Medicare could have saved $4.2 billion of an estimated $7.3 billion in spending on inhalers in 2017 by using VA-negotiated prices and the VA formulary.3

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