New Survey Finds Medicare Prices for Top 20 Drugs Used by Seniors Are Much Higher than Prices Negotiated by Department of Veterans Affairs (VA)
Very High Medicare Drug Prices Costly to Seniors and Taxpayers
Washington, D.C. - A survey released today found that drug prices under the new Medicare drug program will be considerably higher than the prices negotiated by the Department of Veterans Affairs (VA). According to the survey, the median price difference for the 20 drugs most frequently used by seniors is 48.2 percent.
The survey, released by the consumer health organization Families USA, found that prices under the new Medicare drug benefit will have a big impact on both the drug costs borne by senior citizens and on American taxpayers. Through premiums, deductibles, and copayments, seniors will bear approximately one-fourth of the new drug program's costs. Taxpayers will pay the remaining three-quarters.
When the Medicare drug benefit was under consideration, the Administration and congressional leaders promised that a program operated through many private plans would provide, through competition, low drug prices. The Families USA survey belies that assertion.
"The huge prices paid by seniors and taxpayers could have been avoided if Congress and the President had not caved in to the pressure of the drug lobby," said Ron Pollack, Executive Director of Families USA. "They prohibited Medicare from bargaining for cheaper prices and, to ensure that this would never change, they delegated the administration of the benefit to private plans, which have far less bargaining clout.
"As a result, many seniors will be burdened with unaffordable, high drug costs, and America's taxpayers will be fleeced."
The survey found that the lowest VA price is much lower than the lowest Medicare prescription drug plan (PDP) price for 19 of the top 20 drugs.
* For half of the top 20 drugs, the lowest Medicare prescription drug plan price is at least one and one-half times higher than the lowest VA price.
* For one-quarter of the top 20 drugs, the lowest Medicare prescription drug plan price is at least twice as high as the lowest VA price.
* For three of the top 20 drugs, the lowest Medicare prescription drug plan price is at least four times grater than the lowest VA price.
Among the top seven drugs prescribed for seniors, the annual difference between the lowest VA prices and lowest Medicare drug plan prices are as follows:
* Plavix (75 mg., an anti-clotting agent): lowest VA price is $887.16; lowest Medicare plan price is $1,229.64—a difference of $342.48, or 38.6 percent.
* Lipitor (10 mg., cholesterol lowering agent): lowest VA price is $497.16; lowest Medicare plan price is $717.84—a difference of $220.68, or 44.4 percent.
* Fosamax (70 mg., osteoporosis treatment): lowest VA price is $493.32; lowest Medicare plan price is $709.68—a difference of $216.36, or 43.9 percent.
* Norvasc (5 mg., calcium channel blocker): lowest VA price is $301.68; lowest Medicare plan price is $458.88—a difference of $157.20, or 52.1 percent.
* Protonix (40 mg., gastrointestinal agent): lowest VA price is $253.32; lowest Medicare plan price is $1,080—a difference of $826.68, or 326.3 percent.
* Celebrex (200 mg., anti-inflammatory agent): lowest VA price is $619.80; lowest Medicare plan price is $865.08—a difference of $245.28, or 39.6 percent.
* Zocor (20 mg., cholesterol lowering agent): lowest VA price is $167.80; lowest Medicare plan price is $1,323.72—a difference of $1,155.92, or 688.9 percent.
No single Medicare plan offers the lowest price for all 20 drugs compared to its plan competitors. As a result, for seniors who take multiple medicines, the total difference between VA and Medicare plan prices may be much larger than 48 percent.
For example, for a person purchasing a year's supply of the top five drugs—Plavix, Lipitor, Fosamax, Norvasc, and Protonix—the lowest VA price is $2,432.64. In comparison, the prices (paid partially by Medicare beneficiaries and partially by taxpayers) for the five plans recommended by the government's Web-based "Medicare Prescription Drug Plan Finder" for a person purchasing those five drugs are:
* Humana, Inc.: $4,206-$1,773.36 (or 73 percent) higher than the lowest VA price
* First Health Premier: $5,010.60-$2,577.96 (or 106 percent) higher than the lowest VA price
* Medi-Care First: $4,530.48-$2,097.84 (or 86 percent) higher than the lowest VA price
* PacifiCare: $4,561.16-$2,128.52 (or 87 percent) higher than the lowest VA price
* WellCare: $4,348.80-$1,916.16 (or 79 percent) higher than the lowest VA price
According to the Families USA survey, VA prices are lower for both generic and brand-name drugs:
* 18 of the 20 most-prescribed medicines for seniors are brand-name drugs. For 17 of those 18 brand-name drugs, the VA price was much lower than Medicare drug plan prices. For those drugs, the median difference between the lowest Medicare plan price and the lowest VA price is 44.1 percent.
* Two of the top 20 drugs are generics. For those drugs, the median difference between the lowest Medicare drug plan and the lowest VA price is 94.5 percent.
The Families USA report was based on a comparison of VA prices with the prices in two Medicare drug regions: region 5 (covering the District of Columbia, Maryland, and Delaware) and Region 14 (covering Ohio). Only drugs that were on a Medicare prescription drug plan's formulary—drugs for which the plan would have actively negotiated prices—were included in the analysis. All data were collected during the week of November 14, 2005 (when the new program's enrollment began) from the Centers for Medicare and Medicaid Service's "Medicare Prescription Drug Plan Finder" at www.medicare.gov.
To read the report, click Falling Short: Medicare Prescription Drug Plans Offer Meager Savings. For a copy of the prices for each of the 20 drugs in all plans in the two regions, click here.
