Health Services Research & Development

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Medicare Could Learn a Thing or Two from VA

June 15, 2017


Walid Gellad, MD, MPH,an investigator with HSR&D's Center for Health Equity Research & Promotion (CHERP), and Director for the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, authored an article in The Wall Street Journal (June 14, 2017) on how Medicare might benefit by following VA's lead in lowering the cost of prescription drugs. President Trump and 80% of the general public, according to some polls, agree that Medicare should negotiate lower drug prices; however, these negotiations would work only if there were some limitations on the drugs available to patients. To gain insight into this strategy, Dr. Gellad suggests looking to the VA healthcare system, which maintains a well-respected and highly functioning national formulary. Drugs not on the formulary are available, but reserved for when the formulary drug is inappropriate or ineffective. The VA formulary ensures high-quality prescribing while lowering costs for both patients and taxpayers. Veterans with Hepatitis C virus (HCV), for instance, pay an out-of-pocket maximum of $33 for a full course of Harvoni (prevents HCV from multiplying in the body) compared with around $6,000 for patients using Medicare Part D. This is just one example of how a well-functioning formulary lets Veterans get the medications they need with low copayments. A national formulary is compatible with high-quality, efficient and safe healthcare, as demonstrated by independent analyses comparing VA with the private sector. In addition, a national formulary could save the country billions on its prescription bill, and VA could serve as a model.