Most People Think Drug Rebates Are a Good Deal

The National Committee to Preserve Social Security and Medicare recently released an issue brief outlining two proposals aimed at saving money in the Medicare program: allowing the federal government to negotiate lower prescription drug prices, and restoring drug manufacturer discounts for low-income Medicare beneficiaries.  By law, the federal government cannot negotiate for Medicare Part D drug prices, although both Medicaid and the U.S. Department of Veterans Affairs (VA) can.

The Congressional Budget Office (CBO) estimates that the federal government would save $141 billion over ten years if drug manufacturer discounts for low-income beneficiaries were restored. In addition, the Center for Economic and Policy Research estimates that if the federal government was allowed to negotiate lower drug prices like it does in Medicaid and through the VA, it could save up to $541 billion over ten years.
Medicare drug negotiation and discounts are popular among Americans; in a November 2012 poll of 1,200 adults, 81 percent of Democrats and 70 percent of Republicans favor allowing the government to negotiate Medicare Part D prices with manufacturers.

Legislation introduced this year, such as the Medicare Drug Savings Act of 2013, would allow the Medicare program to benefit from the same discounts received for people with Medicaid. Restoring the rebates is a good deal for older adults and people with disabilities, who might see lower Medicare Part D premiums, while also lowering the nation’s deficit.

Read the issue brief.