DOD and VA Health Care Jointly Buying and Mailing Out Pharmaceuticals Could Save Millions of Dollars

摘要

This report discusses what the Departments of Veterans Affairs (VA) and Defense (DOD) have done and what more they could do to reduce drug prices and dispensing costs. In fiscal year 1999, VA and DOD together spent about $2.4 billion-or about 2 percent of all domestic drug sales-for about 140 million prescriptions for veterans, and for active duty and retired military and their families. Recently, soaring drug costs have focused attention on the merits of having the agencies procure their drugs jointly, and better manage their pharmacy operations. The driving expectation is that, as the two agencies buy more of a particular drug, their leverage-particularly under competitively bid committed-use contracts-will permit them to exact discounts from drug manufacturers Committed-use contracts establish a fixed price for one or two products in a particular therapeutic class. In exchange for a low price, the Departments commit to use the drugs to treat patients in their health care systems. This commitment encourages the prescribing and use of contract drugs and will also lead the Departments' medical systems to treat their patients consistently. Medical necessity would require that some patients be allowed to use alternate drugs.