Part D Negotiation Will Save Medicare And Seniors Billions

An analysis by the National Committee to Preserve Social Security and Medicare shows that health care reform proposals, which allow Medicare to negotiate the lowest drug prices for beneficiaries in Part D, would save $24 billion each year. That savings would be more than enough to close the Part D coverage gap known as the “doughnut hole” and address other deficiencies in the Part D plan.

Currently, Medicare is prohibited from negotiating lower drug costs for beneficiaries in Part D. If that ban was removed, Medicare could bargain for lower costs just as Medicaid and the Veteran’s Administration do now. The National Committee has compared the lowest prices obtained by private Part D plans for the top ten prescribed drugs with prices obtained by the VA for the same drugs. The VA savings were substantially greater for all ten drugs; Amlodipine Besylate, Furosemide, Lipitor, Lisinopril, Hydrocodone, Atenolol, Levothyroxine NA, Hydrochlorothiazide, Metroprolol Tartrate, Metformin HCL. For example:

- Part D plans spend 99.7% more than the VA for the generic form of the hypertension drug Norvasc (amlodipine besylate).
- Part D plans spend 64% more than the VA for the generic form of the most commonly filled Part D prescription, Lasix (furosemide).
- Part D plans spend 28.5% more for the heart disease drug, Lipitor, than the VA.

“This report shows that allowing price negotiation in Part D is a win-win proposition for Medicare and seniors because it shifts the focus back to providing the best prices to government and its beneficiaries rather than boosting industry profits. It’s clear we can find health care reform savings in Medicare without cutting benefits; however, drug makers and insurers have a vested interest in protecting the status quo. Reforming Part D must be a part of any final health care bill and allowing price negotiation is a critical part of that reform.” – The National Committee