Medicare Pays More for Drugs than Medicaid

Medicare Pays More for Drugs than Medicaid

Last week the Congressional Budget Office (CBO) released a report that revealed Medicare outpatient plans are three times more expensive for the same drugs as those covered by Medicaid.

According to Bloomberg News, “Budget officials analyzed prices of 176 popular brand name drugs and found the price for a 30-day supply of medication was $118 on average through Medicaid and $343 through Medicare Part D, which pays for prescription drugs in retail pharmacies. The government also paid twice as much on the same drugs through Medicare versus the Veterans Affairs program.”

The report found similar price disparities in expensive specialty drugs that treat complicated conditions like cancer.

Why does that happen?

Again, according to Bloomberg News, “Manufacturers have to offer Medicaid plans their lowest possible price under federal regulations in order to participate in other federal drug programs, which is likely why the Medicaid prices are so low.”

In addition, the Secretary of Health and Human Services (HHS) is prohibited from negotiating directly with pharmaceutical companies on behalf of the more than 40 million Americans who get their prescription drug coverage from Medicare Part D.

The Senior Citizens League strongly believes allowing the HHS Secretary to negotiate with the drug companies is one important way to reduce the costs of drugs for seniors.  We will be continuing our efforts to get Congress to pass legislation that would make this possible.