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'No Reason for This—Other Than Greed,' Says Sanders as GAO Shows Medicare Pays Twice as Much as VA for Same Drugs

"We can no longer allow the pharmaceutical industry to rip-off the more than 40 million people who receive prescription drug coverage through Medicare Part D and fleece U.S. taxpayers."

A man prepares the daily pills his wife will need for the week on January 4, 2020 in Sarasota, Florida. (Photo: Andrew Lichtenstein/Corbis via Getty Images)

A new report commissioned by Sen. Bernie Sanders shows that Medicare Part D in 2017 paid twice as much as the Department of Veterans Affairs for the same prescription medicines, a finding the Vermont senator characterized as further evidence of the need to "take on the greed" of Big Pharma and empower the federal government to negotiate drug prices.

The Government Accountability Office (GAO) study (pdf) released Thursday found that in a "sample of 399 brand-name and generic prescription drugs, the V.A. paid an average of 54% less per unit than Medicare, even after taking into account rebates and discounts."

"If the VA can negotiate with the pharmaceutical companies to substantially reduce the price of prescription drugs we must empower Medicare to do so as well."
—Sen. Bernie Sanders

The report found that the VA paid at least 50% less for 233 of the 399 drugs examined, and at least 75% less for 106 of the medicines.

"The programs pay for drugs differently," the GAO explains. "Medicare reimburses the Part D plan sponsors to pay pharmacies, but the VA buys drugs directly from manufacturers. The V.A. may be able to get lower prices because it can... negotiate as a single health system with a unified list of covered drugs [and] use discounts defined by law that Medicare doesn't have."

In a statement Thursday, Sanders said that "there is absolutely no reason, other than greed, for Medicare to pay twice as much for the same exact prescription drugs as the VA."

"If the VA can negotiate with the pharmaceutical companies to substantially reduce the price of prescription drugs we must empower Medicare to do so as well," Sanders added. "We can no longer allow the pharmaceutical industry to rip-off the more than 40 million people who receive prescription drug coverage through Medicare Part D and fleece U.S. taxpayers."

Under current federal law, Medicare is prohibited from negotiating drug prices with manufacturers, an unpopular ban that analysts and advocacy groups say is partially responsible for sky-high prescription medicine prices in the United States. During the 2020 campaign, President-elect Joe Biden vowed to "repeal the existing law explicitly barring Medicare from negotiating lower prices with drug corporations."

"If the pharmaceutical industry will not end its greed, which is literally killing Americans, then we will end it for them."
—Sen. Bernie Sanders

In an effort to restrain soaring drug costs, the Democrat-controlled House passed legislation in December of 2019 that would have enabled the federal government to negotiate the prices of up to 250 commonly used drugs. Senate Majority Leader Mitch McConnell (R-Ky.) refused to allow a vote on the bill, which progressives—including Sanders—criticized as inadequate.

In January of 2019, Sanders introduced the Medicare Drug Price Negotiation Act, legislation that would have directed the secretary of Health and Human Services "to negotiate lower prices with drug manufacturers that participate in Medicare Part D."

"The United States pays by far the highest prices in the world for prescription drugs. This has created a healthcare crisis in which one in five American adults cannot afford to get the medicine they need," Sanders said at the time. "If the pharmaceutical industry will not end its greed, which is literally killing Americans, then we will end it for them."

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