Jan 15, 2019

Medicare would save billions on drugs if it copied the VA

Data: Jama Internal Medicine; Chart: Chris Canipe/Axios

Medicare would have saved an average of nearly $12 billion per year if it had the Department of Veterans Affairs' ability to negotiate directly with pharmaceutical companies, according to researchers writing in the journal JAMA Internal Medicine. And that's just for 50 drugs.

Yes, but: Those savings would also require Medicare to say "no" to covering some drugs — a shift from the current policy, in which Medicare pays for almost all FDA-approved medications.

Details: Discounts on expensive brand-name drugs like Harvoni, Crestor and Xarelto would have led to large portions of the savings in the Medicare Part D program, according to the researchers. The analysis did not factor in injectable drugs like insulin, or drugs administered in hospitals and doctors' offices.

The bottom line: There is a tradeoff here. Medicare could save a lot of money by copying what the VA does, but Medicare would have to be willing to restrict access to some drugs.

  • However, according to prior research by Austin Frakt, a health economist within the VA system in Boston, the amount Medicare would save from discounted drugs would exceed the dollar value of Medicare patients losing some choice in what drugs they can take.

Go deeper

A venture capitalist wants to mimic blockbuster drugs at a lower price

A venture capitalist is launching a company today to create new drugs that mimic the effects of blockbuster drugs, and then sell them to insurers and hospital systems at a lower price, STAT reports.

Between the lines: The key question is whether insurers and hospitals will buy these new drugs over their competitors.

Go deeperArrowJan 13, 2020

Trump's moves on drug importation, may not achieve much

Illustration: Sarah Grillo/Axios

Even if the Trump administration is able to implement its latest plan to let people import prescription drugs from Canada, it probably won't make much of a difference, experts say.

Between the lines: Canada doesn't have nearly enough drugs to meet American demand, and even if it did, it doesn't want to send them to us at the expense of its own market.

Go deeperArrowDec 19, 2019

The health care industry's happy holidays

Illustration: Eniola Odetunde/Axios

The year-end spending bill in Congress epitomizes the power of health care interests.

The big picture: There are lots of goodies for the industry, while patients will get the worst kind of holiday surprise — more medical bills.

Go deeperArrowDec 20, 2019