TUESDAY, Feb. 4, 2020 (HealthDay News) — If you don’t need insulin, you probably haven’t paid much attention to its skyrocketing cost, but new research shows that exorbitant drug pricing eventually affects everyone.
The study found that in 2017, Medicare spent nearly $8 billion on insulin. The researchers said that if Medicare were allowed to negotiate drug prices like the U.S. Department of Veterans Affairs (VA) can, Medicare could save about $4.4 billion just on insulin.
“Medicare now accounts for a third of all drug spending. Legislation allowing Medicare to negotiate prices and establish a central formulary would help save taxpayers money,” said the study’s lead author, Dr. William Feldman.
“We just looked at insulin, but other studies have shown other drugs would have savings as well,” Feldman added. He’s a research fellow at Brigham and Women’s Hospital and Harvard Medical School in Boston.
The VA already has the ability to get discounts on drugs and to negotiate prices. It has also established a national formulary. A formulary is a list of drugs that are approved for treating certain conditions. Feldman said if a formulary only accepts a few drugs for each condition, there’s more competition and flexibility in pricing as companies try to get their drug included.
Other governments — like Canada — use their large buying power to negotiate better prices. But the law that established Medicare Part D said Medicare cannot interfere with negotiations between health plans and pharmaceutical companies, according to the journal Health Affairs. That means Medicare Part D, by law, cannot negotiate drug prices like other governments do.