The Office of the Inspector General for HHS released a report indicating that Medicaid gets deeper discounts on many prescription drugs than Medicare. Much of this is attributed to Medicaid getting its discounts through health-related laws. Medicare, on the other hand, negotiates prices with private insurers and drug companies.
As indicated in a NYT article, this information could be used by policymakers to make changes to how Medicare approaches drug costs under the new deficit-reduction law. This might be an inspiration to Congress as they look to change the Medicare cost trajectory, given that the CBO estimates that under current law, Medicare’s outpatient drug benefits will increase an average of almost 10% a year. This is equivalent to an increase from $68 billion this year to $175 billion in 2021.