Prices on branded drugs increased 3.9% in Q1 2006(registration required), the largest increase in six years. Coincidentally, the Medicare Part D drug coverage program went into effect 1/1/2006. Part D has resulted in somewhere around ten million new customers for insurers, who will now pay 4.7% more for Lipitor and 13.3% more for Ambien.
In terms of dollars, AARP calculates the average senior’s costs will increase by almost $20 per month, as the Part D providers are passing the cost increases along to their subscribers.
There has been the usual rash of outraged protests from various mouthpieces for big pharma, all of which are either disingenuous, outrageously self-serving, misleading, or poor attempts at deflecting blame towards insurers et al.
So what happens when pharma decides to increase prices?
Well, the mass media starts looking at what the Veterans Administration pays for drugs. Compared to the VA, the only federal entity allowed to negotiate prices, Part D prices are now 46% higher on average.
Here are a couple examples, quoted from the Families USA report.
“For Zocor (20 mg), the lowest VA price for a year’s treatment was $127.44, while the lowest Part D plan price was $1,275.36, a difference of $1,147.92 or 901 percent.
For Fosamax (70 mg), the lowest VA price for a year’s treatment was $265.32, while the lowest Part D plan price was $727.92, a difference of $462.60 or 174 percent.”
So here we have big government, in the form of the VA, delivering prices that are about half of what private industry can obtain. While that’s kind of interesting, it gets way more than “kind of” interesting when you consider that Part D has added $8 trillion to the nation’s long term debt. That’s a quarter of the entire Medicare deficit…
Tell me again how privatizing health care for seniors is a good deal for taxpayers, seniors, and the country?
Jun
21
While I am not a fan of Big Pharma, and I think the industry is more profitable than it needs to be to sustain its R&D and provide its shareholders with an attractive risk adjusted return, I wonder if the industry looks at pricing to the VA as more akin to charity than the result of a hard nosed negotiation. I note that everyone receiving VA care must either have (1) a very low income or (2) a service connected disability or injury (or both). If the industry is inclined to cut a price break to a large group, veterans appear to be an attractive candidate.
That does not mean that the drug industry would sell to Medicare on similar terms under a direct negotiation approach. Where are the price comparisons, for example, between Part D and large state Medicaid programs like California, Texas and New York? How do they stack up?
I know the big drug retailers like Walgreens have walked away from state Medicaid business in the past when it felt it could not earn an adequate return under the terms the state was insisting on. A mutually satisfactory agreement was eventually worked out. While hospitals accept Medicare’s dictated prices because the volume is too important and, to some extent, they can shift costs to other payers, Medicare is not nearly as important to Big Pharma as a percentage of total volume. I don’t think dictated prices would work with prescription drugs, and I don’t think they should work either.
“I don’t think dictated prices would work with prescription drugs, and I don’t think they should work either”. So in other words your saying the Wal Mart business plan is no good uh? Are you saying it wont work because allowing big phrama to gouge is just the American way?
Veterans lose again! BVA denied VA violation of 1722a claim
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Let’s assume you are at the VA picking up your prescription. You and another veteran in line in front of you are prescribed the exact same identical prescription of 30 pills. Both supplies carry a copay of $8. Right? But, your prescription requires that you split your supply. You now have a two month supply (15 pills 1/2 pill per day). This $8 supply now increases in copay cost to $16, for the exact pill medication and supply that costs $8. But let’s kick it up a notch, assume that veteran in front of you, having still the same prescription, his supply for a 30-day supply is instead 90 pills. Copay remains at $8 for this 30-day 90 pill supply.
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Hope this explains, how the veteran is overcharged by the VA, and just got shafted again (3/13/07) by the Board of Veterans Appeals (BVA).What veterans have known as fact, is that veterans continue to lose benefits. This is just another example.
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Criteria & Analysis by the Board of Veterans Appeals.
“. …The appellant contends that the standard copayment is excessive in light of the pill splitting.” No where in my claim did I mention the word ‘standard.’ To determine what then is the standard $8, 30 day supply, one must compare 2 supplies. The VA apparently has two(2) standard supplies. A 30 day supply of 30-60-90 pills. Copayment cost $8. Then a second standard 30 day supply of 15 pills, $8 copay. Two distinct and different standards. A standard in cost, but no standard in supply. One does not have to read any further to see the unfairness of the BVA decision.
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The BVA cites my argument, 38 U.S.C.A. Sec. 1722a “Copayment for medications. Paragraph (2) The Secretary may not require a veteran to pay an amount in excess of the cost to the Secretary for medication as described in paragraph (1).” As just described above.
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Paragraph “(a)(1) Subject to paragraph (2), The Secretary shall require a veteran to pay the United States $8 for each 30-day supply of medication furnished such veteran under this chapter on an outpatient treatment of a non-service connected disability or condition. If the amount supplied is less than a 30-day supply, the amount of the charge may not be reduced.” If the ‘standard’, mentioned first by the BVA describing, “The appellant contends that the standard copayment is excessive..” and according to paragraph 1, is $8 for 30-day supplies of 30,60, or 90 pills, why are veterans charged $16 for a 2 month supply of 30 pills?
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“In addition, the Board notes that the references to the cost of medication contained in 38 USC 1722a clearly pertains to VA’s cost in dispensing the medication, not the cost to the appellant.” That statement is incorrect. Copayment For Medication, 1722a, (listed above) clearly, makes no mention the VA’s cost of dispensing medication. It mentions only the veterans’ copayment obligation. A reference is made to the VA cost in the Federal Register, however, the “cost in dispensing the medication” is not the argument. It is the cost in overcharges to the veteran.
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To you, and me it is quite simple. “The Secretary may not require a veteran to pay amount in excess of the cost to the Secretary for medication as described in paragraph (1).” If one supply can be a standard 60, or 90 pill 30 day supply with a copay of $8, how then can a 30 day supply, limited to only 15 pills, for medication administered during treatment lasting several months, at a copay of $8, each 30 day period be standard supply? “…As described in paragraph (1)”. Therefore, an “excess of the cost” does indeed exist.
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If given to an eight grade grammar school class this arithmetic problem of the two supplies to find the excess of the cost, what would be their answer? They too, would find that an excess of the cost does exist, “..for medication as described in paragraph (1)” This is a bad sign. Indicating exactly how veterans with disabilities claims, going before the BVA, and Veterans’ Law Judge, John E. Ormand, Jr., are adjudicated.
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“(b) The Secretary, pursuant to regulations which the Secretary shall prescribe may-…(1) increase the copayment amount in effect under subsection (a);..” “Pursuant to regulations” means according to the law as written. The BVA , has decided the Secretary (VA) can make law to fit, rather than prescribe the law, or regulations as written.
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Citing..Under 38 C.F.R. Sec. 17.110 Copayments for medications.
“(b) Copayments. (1) Unless exempted under paragraph (c) of this section, a veteran is obligated to pay VA a copayment for each 30-day or less supply of medication provided by the VA on an outpatient basis (other than medication administered during treatment).” If ‘administered during treatment’ meant hospitalization, that’s not what it says, or should have been worded. But it did not. It is not ambiguous in the context in which it is presented. Citing, ‘on an outpatient basis, other than medication administered during treatment’ The meaning is quite clear. A patient receiving 60, or 90 day outpatient supply is clearly a treatment of a condition, such as a heart condition, diabetes, etc.
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BVA mentions, “Thus, it is clear that the VA’s cost of filling the appellant’s 30-day prescription exceeds the $8 copayment under 38 C.F.R. Sec. 17.110.” Again the argument clearly is not the VA cost as noted in the Federal Register 12/6/2001. When determining the medication copay cost, VA factored in everything, except the cost of the medication. The BVA’s inadequacy, and mindset shown here, is for all to see.
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BVA denial in part, “…adherence in the face of overwhelming evidence in support of the result in a particular case: such adherence would result in unnecessarily imposing additional burdens on the VA with no benefit flowing to the claimant.” Never mind the burden of overcharges, or the benefit flowing to well over 1.1 million veterans whose prescriptions call for pill splitting.
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It is clear, the BVA came up with this denial of overcharges claim due to national budget concerns due to the involvement in Iraq, Afghanistan, and who knows were else. Veterans did not cause that. But men and women went to military service because of it. This is how they get rewarded by a grateful nation. There are many things in life we do not like, but ignoring a veterans’ cause, or the law is not an option. Who lost? Having sat in the lobby of my VA hospital and observed those that passed by, it’s not hard to see, there are many who could use any help they can get, as well those returning from Iraq, Afghanistan, and Walter Reed.
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An appeal with the United States Court of Appeals for Veterans Claims has begun. CVA Docket No.07-0864