Posted on September 21, 2009 11:17
Categories: Medicaid | Medicare | Employer and Individual Insurance | Special Populations
Topics: Cost-effectiveness | FEHBP | Medicaid | Medicare | Military & Veterans | Prescription Drugs | Spending
On June 24, the Government Accountability Office (GAO) released a report examining prescription drug cost-control mechanisms in Medicare Part D, Medicaid, the Veterans Health Administration, the Department of Defense (DoD), and the FEHBP.
From the report:
FEHBP uses competition among health plans to control prescription drug spending, giving plans an incentive to rein in costs and leverage their market share to obtain favorable drug prices. Most FEHBP plans contract with pharmacy benefit managers (PBMs) to help administer the prescription drug benefit. In a 2003 report, GAO found that the PBMs reduced drug spending by: negotiating rebates with drug manufacturers and passing some of the savings to the plans; obtaining drug price discounts from retail pharmacies and dispensing drugs at lower costs through mail-order pharmacies operated by the PBMs; and using other techniques that reduce utilization of certain drugs or substitute other, less costly drugs. While OPM does not negotiate drug prices or discounts for FEHBP, it attempts to limit spending through annual premium and benefit negotiations with plans, including the encouragement of spending controls such as generic substitution.
Full report: Prescription Drugs: Overview of Approaches to Control Prescription Drug Spending in Federal Programs (PDF | 209.69 KB)
Government Accountability Office (GAO). (2009). Prescription Drugs: Overview of approaches to control prescription drug spending in federal programs.
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