Lawmakers Request GAO Study Comparing Medicare Rx Drug Prices, VA Prices

CHICAGO, IL.—U.S. Representatives Rahm Emanuel (D-IL), John Spratt (D-SC), Tom Allen (D-ME), Chet Edwards (D-TX) and Rosa DeLauro (D-CT) released the following letter to the U.S. General Accounting Office requesting a study that compares the prices currently paid by Medicare for covered drugs to the prices obtained by the Veterans Administration on prescription drug purchases.

The text of the letter follows.

Dear Comptroller General Walker,

We are writing to request a General Accounting Office study that compares the prices currently paid by Medicare for covered drugs to the prices obtained by the Veterans Administration on prescription drug purchases.

An analysis conducted by the Inspector General’s Office at the Department of Health and Human Services (HHS) and cited in a July 9 House Budget Committee hearing on Waste, Fraud, Abuse in Federal Mandatory Programs found that Medicare payments for 24 leading drugs were  higher than prices available to the VA in 2000. 

According to the July 9 testimony of the Acting Inspector General of HHS, “Medicare payments were… $1.9 billion higher than prices available through the Federal Supply Schedule used by VA and other federal purchasers. This excessive payment continues to grow as the amount paid by Medicare grows larger.”

We request a study that replicates and expands on this analysis by comparing Medicare reimbursement for the 50 most commonly purchased drugs currently covered by Medicare to the prices paid by the VA. 

As you stated before the House Budget Committee on Waste, Fraud and Abuse in Federal Mandatory Programs on June 18, “Resources are not unlimited, and when they are diverted for…inefficient or ineffective purposes, both taxpayers and legitimate program beneficiaries are cheated.” 

We hope that this study can help determine whether there are inefficiencies in Medicare payments for pharmaceuticals, and if so, inform our efforts to improve the efficiency and effectiveness of the Medicare drug benefit. 

Thank you for your attention to this matter.

                Rahm Emanuel                                                                                                      John M. Spratt, Jr.

                Member of Congress                                                                                           Member of Congress

Tom Allen                                                             Chet Edwards                                                       Rosa L. DeLauro

Member of Congress                                           Member of Congress                                           Member of Congress

LINK--Letter to the U.S. General Accounting Office