FDAnews Drug Daily Bulletin


Dec. 5, 2005

Prices offered by 10 leading drug plans participating in the Medicare Part D program are significantly higher than those negotiated by the federal government or available to consumers in Canada, according to an analysis by the minority staff of the House Committee on Government Reform.

The report, prepared at the request of Rep. Henry Waxman (D-Calif.), the committee's ranking minority member, concludes that the average drug prices offered by 10 Medicare drug plans are more than 80 percent higher than the prices negotiated for other federal health programs, and more that 60 percent higher than those paid by consumers in Canada. The minority staff investigation also determined that the Part D prices are more than 3 percent higher than those available on Drugstore.com, and nearly 3 percent higher than the drug prices available at Costco.

The analysis is based on an examination of the drug prices negotiated by 10 of the approximately 40 drug plans participating in Part D. The minority staff compared the plans' prices for 10 drugs with the highest sales to beneficiaries in 2004 with four sets of benchmark prices: 1) the prices negotiated by the federal government and listed on the Federal Supply Schedule; 2) the prices established by Canada's Patented Medicines Prices Review Board; 3) the prices currently available at Drugstore.com; and 4) the prices currently available at Costco.

For the 10 Medicare drug plans, the average price for a one-month supply of the 10 drugs was $1,158. In comparison, the price negotiated by the federal government was $630, or a decrease of 84 percent. The price difference was almost as wide in Canada, with Canadian consumers paying an average of $717 for the 10 drugs included in the analysis.

To view the committee report, "New Medicare Drug Plans Fail to Provide Meaningful Drug Discounts," go to http://www.democrats.reform.house.gov/Documents/20051122095407-45741.pdf (http://www.democrats.reform.house.gov/Documents/20051122095407-45741.pdf).