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Families USA:
Medicare drug plan prices for the top drugs prescribed to seniors are 58 percent higher than the same drugs provided to veterans by the Department of Veterans Affairs (VA), according to a report released today.
The new report, issued by the consumer health organization Families USA, was released shortly before the House of Representatives was scheduled to vote on a bill to end the current prohibition preventing Medicare from bargaining for cheaper drug prices.
The bill is a top priority for House Speaker Nancy Pelosi and her new Democratic majority.
For the top 20 drugs prescribed to seniors, the report examined prices charged by the VA compared to the prices charged by the five companies with the largest enrollment in the Medicare (Part D) drug program.
"These high prices devastate seniors who need to take multiple medicines, especially when they reach the coverage gap known as the 'doughnut hole,'" said Ron Pollack, Executive Director of Families USA. "They are also a rip-off of American taxpayers, who pay for three-quarters of the costs of Medicare Part D."
For all of the top 20 drugs prescribed to seniors, VA prices were substantially lower than the lowest prices charged by the Part D insurers, according to the report.
The median price difference was 58 percent.
First, they claim that private market competition under Part D is more effective in reducing prices than Medicare bargaining; and second, they claim that Medicare bargaining would reduce prices so significantly it would harm research and development," said Pollack.
According to the report, the largest U.S.-based drug companies spent more than twice as much on marketing, advertising, and administration as they spent on R&D (13.9 percent versus 32.0 percent of revenues), and they retained more in profits than they spent on R&D (17.4 percent versus 13.9 percent).
VA pricing information was obtained from the VA's price schedules.
Posted on January 11, 2007 04:46 PM
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