Using confidential information on drug prices to compare the costs of drugs purchased under the Medicare Part D program with the costs of drugs purchased under traditional Medicaid, the House Committee on Oversight and Government Reform found that Medicare Part D pays on average 30 percent more for drugs than does Medicaid, resulting in a windfall worth more than $3.7 billion for drug manufacturers in the first two years of the Medicare Part D program. The report, Medicare Part D: Drug Pricing and Manufacturer Windfalls, was released July 24.
The report examined drug benefit spending for about 6 million dual eligibles. In 2006, the first year of the drug benefit, Medicare paid $1.7 billion more for the 100 most commonly used drugs by dual eligibles than Medicaid would have paid. In 2007, Medicare paid about $2 billion more than Medicaid would have paid. Medicaid, on average, gets discounts of about 30 percent on drugs for beneficiaries. Medicare receives a discount of about 8 percent on average through its drug benefit. Read the report.
