Want to save $2.8B-plus? Medicare drug price negotiation could, senator reports

Federal law doesn’t allow Medicare to directly negotiate drug prices with pharmas. What if it did? A recent report from a U.S. senator found that Medicare bargaining could save Medicare Part D $2.8 billion a year on just the 20 most commonly prescribed brand-name drugs.

The new report, drafted by Sen. Claire McCaskill, D.-Mo., the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee, compared Medicare Part D spending on the 20 most commonly prescribed drug brands to the cost if those drugs were priced on par with the Department of Veterans Affairs, which does negotiate prices.

Even after applying an average 17.5% branded drug rebate, as published by the Centers for Medicare and Medicaid Services, and increasing federal prices to cover miscellaneous costs like dispensing fees, Medicare could still save $2.8 billion a year if prices of those drugs were federally negotiated, the report finds.

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