Why shouldn the government negotiate drug prices for Medicare like the Department of Veterans Affairs does?
VA prices reflect an “apples to oranges” comparison with Medicare: VA drug prices do not include the costs of pharmacy and administrative services, which are included in Part D costs, and reflect restrictions on access to medications and pharmacies that do not now occur in the federal employees’ health insurance program or in Medicare. Two elements are needed to negotiate prices – for the VA, private drug plans, or the federal government negotiating on behalf of Medicare: Volume buying and the ability to walk away from the deal if the price is too high. If the government couldn’t reach a deal with a drug company, that would mean seniors would not have access to those drugs. And that’s just what happens with the VA. According to an analysis by Columbia University Prof. Frank Lichtenberg published by the Manhattan Institute,[6] only 38% of the drugs approved by the FDA in the 1990s and 19% of the drugs approved since 2000 are on the VA national formulary, or covered drug list. According
