Many people … say that Medicare should follow the lead of the U.S. Department of Veterans Affairs, which negotiates drug prices directly with manufacturers … That’s a seductive argument. But it ignores some key facts.First, the VA’s low prices are possible because it puts a tight limit on the number of drugs physicians may prescribe … Further, veterans using the VA system can’t go to their neighborhood pharmacy … It is unlikely that Medicare beneficiaries would accept such limitations.Most Part D plans are operated by pharmacy benefits managers (PBMs) that … negotiate prices on behalf of more than 50 million people with drug coverage … It’s hard to believe that Medicare, with 22 million Part D enrollees, could achieve discounts greater than a company with twice that number of customers.
So, when ALL of the facts are considered, the attitude of the HHS Secretary seems a lot more sensible. Thus, Antos concludes that “the best way to lower costs is through more competition, not more government management.” I think he’s right.
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