Prescription Drugs: Comparison of DOD, Medicaid, and Medicare Part D Retail Reimbursement Prices
GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC
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Why GAO Did This Study. In 2011, federal spending for prescription drugs by DOD, Medicaid, and Medicare Part D totaled 71.2 billion representing about 85 percent of all federal prescription drug expenditures for about 114.4 million beneficiaries. Each program reimbursed retail pharmacies for outpatient prescriptions filled at these pharmacies by their beneficiaries. GAO was asked to compare prices paid for prescription drugs across federal programs. This report compares retail reimbursement prices paid by DOD, Medicaid, and Medicare Part D for a sample of prescription drugs and describes factors affecting these prices. Using agency data for the third quarter of 2010 the most recent data available at the time of GAO s analysis, GAO selected a sample of 50 high-utilization and 50 high expenditure drugs after accounting for overlap between the two groups, the final sample contained 78 drugs. GAO calculated average gross unit prices paid to pharmacies by each program by adding total program-paid and beneficiary-paid amounts and dividing by total utilization for each drug, the entire sample, and the subsets of brand-name and generic drugs. GAO calculated net unit prices paid by each program by subtracting all agency reported beneficiary-paid amounts, rebates, refunds, and other price concessions from the gross unit prices. GAO also interviewed DOD, Medicaid, and Medicare Part D officials and reviewed literature describing factors affecting drug prices.
- Economics and Cost Analysis