Medicaid paying 32% less than Medicare Part D for medications

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Medicaid is paying the lowest average price for 78 high-use and high-expenditure brand-name and generic drugs, a new federal report finds.

In a sample, Medicaid's average net price was $0.62 per unit, while Medicare Part D paid an estimated 32% more and the Department of Defense paid 60% more. Medicaid also paid the lowest price for generic drugs, according to a Government Accountability Office report released Monday.

In 2011, federal spending by DOD, Medicaid, and Medicare Part D for prescription drugs totaled $71 billion, representing about 85% of all federal prescription drug expenditures for 114 million beneficiaries, the report stated. DOD reimburses retail pharmacies directly for drugs given to beneficiaries; state Medicaid programs reimburse pharmacies and then receive matching federal funds; and Medicare Part D pays pharmacies through plan sponsors.

Click here to read the report. 

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