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The Savings from an Efficient Medicare Drug Plan

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Publication Date:

Publisher(s): Center for Economic and Policy Research

Author(s): Dean Baker

Topic: Health (Pharmaceutical services)

Keywords: Prescription drugs; Price negotiation; Administrative costs

Type: Report

Coverage: United States

Abstract:

The Medicare Modernization Act (MMA) was passed in 2003 to reform the Medicare system, but the result was an inefficient set of rules and regulations. This report projects savings of $384 billion from 2010 to 2013, or close to $100 billion per year, if Medicare were allowed to negotiate directly with the pharmaceutical industry -- paying the same prices for drugs as countries like Australia -- and the program was administered in a more efficient manner.