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Drug Cost Comparisons: Medicare and the Department of Veterans Affairs

In general, Medicare reimburses pharmacies and health care providers for the drugs these entities have already purchased on the open market. In contrast, the Department of Veterans Affairs (VA) purchases drugs directly from a contracted wholesaler (i.e., the pharmaceutical prime vendor) at prices set through statutory rules and negotiations. Previous OIG and Congressional Budget Office studies have found these differences often result in widely different payment amounts for the same drugs—with Medicare payments regularly higher than the VA. Although Medicare and the VA operate under different statutory restraints with different processes to set prescription drug payment amounts, the fact that different Federal programs may pay vastly different amounts for the same drug has often raised concerns. This study will examine how Medicare drug costs compare to the VA's costs for the same drugs.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
May 2025 CMS Drug Cost Comparisons: Medicare and the Department of Veterans Affairs Office of Evaluation and Inspections OEI-BL-25-00200 2026