Department of Veterans Affairs Paid About Half as Much as Medicare Part D for Selected Drugs in 2017

January 15, 2021

new analysis from the US Government Accountability Office shows that, in 2017, the Department of Veterans Affairs paid prescription drug prices that were on average 54% lower than what was paid by Medicare, which by law is not currently allowed to negotiate down the prices that drugmakers choose to set. The GAO’s analysis spans both brand and generic drugs, and its calculations are based on the net prices paid by the government, after accounting for all rebates and other concessions. On more than 100 specific drugs, the VA’s prices were at least 75% cheaper than Medicare’s prices. Let that sink in.

Importantly, 2017 was also the first year the VA began leveraging ICER’s drug assessments in its pricing negotiations with drugmakers to provide greater value to Veterans and taxpayers. While at the time, the pharmaceutical industry sounded alarms that this VA/ICER partnership could simply be “… a means to justify an even more limited and cost-constrained formulary,” comprehensive data from the past three years reveal that the VA has never used a negative ICER report to limit access to a medication, but instead has used our work to achieve better pricing from manufacturers, while expanding access to the treatments that are most valuable to Veterans and their families. Read more here.

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