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Medicare Pays Almost 50% More for Drugs than
Veterans Affairs
Very high Medicare drug prices costly to senior
citizens, taxpayers.
 Dec. 22, 2005 - A survey has found that drug prices
under the new Medicare drug program will be considerably higher than the
prices negotiated by the Department of Veterans Affairs (VA). According
to the survey, the median price difference for the 20 drugs most
frequently used by seniors is 48.2 percent.
The survey, released yesterday by the consumer
health organization Families USA, found that prices under the new
Medicare drug benefit will have a big impact on both the drug costs
borne by senior citizens and on American taxpayers. Through premiums,
deductibles, and copayments, seniors will bear approximately one-fourth
of the new drug program's costs. Taxpayers will pay the remaining
three-quarters.
When the Medicare drug benefit was under
consideration, the Administration and congressional leaders promised
that a program operated through many private plans would provide,
through competition, low drug prices. The Families USA survey belies
that assertion.
"The huge prices paid by seniors and taxpayers
could have been avoided if Congress and the President had not caved in
to the pressure of the drug lobby," said Ron Pollack, Executive Director
of Families USA. "They prohibited Medicare from bargaining for cheaper
prices and, to ensure that this would never change, they delegated the
administration of the benefit to private plans, which have far less
bargaining clout.
"As a result, many seniors will be burdened with
unaffordable high drug costs, and America's taxpayers will be fleeced."
The survey found that the lowest VA price is much
lower than the lowest Medicare prescription drug plan (PDP) price for 19
of the 20 drugs.
For half of the top 20 drugs, the lowest Medicare
prescription drug plan price is at least one and one-half times higher
than the lowest VA price.
For one-quarter of the top 20 drugs, the lowest
Medicare prescription drug plan price is at least twice as high as the
lowest VA price.
For three of the top 20 drugs, the lowest Medicare
prescription drug plan price is at least four times grater than the
lowest VA price.
Among the top seven drugs prescribed for seniors,
the annual difference between the lowest VA prices and lowest Medicare
drug plan prices are as follows:
Plavix (75 mg., an anti-clotting agent):
lowest VA price is $887.16; lowest Medicare plan price is $1,229.64 - a
difference of $342.48, or 38.6 percent.
Lipitor (10 mg., cholesterol lowering
agent): lowest VA price is $497.16; lowest Medicare plan price is
$717.84 - a difference of $220.68, or 44.4 percent.
Fosamax (70 mg., osteoporosis treatment):
lowest VA price is $493.32; lowest Medicare plan price is $709.68 - a
difference of $216.36, or 43.9 percent.
Norvasc (5 mg., calcium channel blocker):
lowest VA price is $301.68; lowest Medicare plan price is $458.88 - a
difference of $157.20, or 52.1 percent.
Protonix (40 mg., gastrointestinal agent):
lowest VA price is $253.32; lowest Medicare plan price is $1,080 - a
difference of $826.68, or 326.3 percent.
Celebrex (200 mg., anti-inflammatory agent):
lowest VA price is $619.80; lowest Medicare plan price is $865.08 - a
difference of $245.28, or 39.6 percent.
Zocor (20 mg., cholesterol lowering agent):
lowest VA price is $167.80; lowest Medicare plan price is $1,323.72 - a
difference of $1,155.92, or 688.9 percent.
No single Medicare plan offers the lowest price for
all 20 drugs compared to its plan competitors. As a result, for seniors
who take multiple medicines, the total difference between VA and
Medicare plan prices may be much larger than 48 percent.
For example, a person purchasing a year's supply of
the top-five drugs - Plavix, Lipitor, Fosamax, Norvasc, and Protonix -
the lowest VA price is $2,432.64. In comparison, the prices (paid
partially by Medicare beneficiaries and partially by taxpayers) for the
five plans recommended by the government's Web-based "Medicare
Prescription Drug Plan Finder" for a person purchasing those five drugs
are:
Humana, Inc.: $4,206-$1,773.36 (or 73
percent) higher than the lowest VA price
First Health Premier: $5,010.60-$2,577.96
(or 106 percent) higher than the lowest VA price
Medi-Care First: $4,530.48-$2,097.84 (or 86
percent) higher than the lowest VA price
PacifiCare: $4,561.16-$2,128.52 (or 87
percent) higher than the lowest VA price
WellCare: $4,348.80-$1,916.16 (or 79
percent) higher than the lowest VA price
According to the Families USA survey, VA prices are
lower for both generic and brand-name drugs:
Eighteen of the 20 most-prescribed medicines for
seniors are brand-name drugs. For 17 of those 18 brand-name drugs,
the VA price was much lower than Medicare drug plan prices. For those
drugs, the median difference between the lowest Medicare plan price and
the lowest VA price is 44.1 percent.
Two of the top 20 drugs are generics. For
those drugs, the median difference between the lowest Medicare drug plan
and the lowest VA price is 94.5 percent.
The Families USA report was based on a comparison
of VA prices with the prices in two Medicare drug regions: region 5
(covering the District of Columbia, Maryland, and Delaware) and Region
14 (covering Ohio). 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. All data were collected during the
week of November 14, 2005 (when the new program's enrollment began) from
the Centers for Medicare and Medicaid Service's "Medicare Prescription
Drug Plan Finder" at www.medicare.gov.
For a copy of the report in pdf,
click here. For a copy of the prices for each of the 20 drugs in all
plans in the two regions, please visit
www.familiesusa.org.
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