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July 18, 2006

Drug Costs Soar on Medicare Part D

Here's proof that states have been making inroads on controlling prescription drug costs in their Medicaid programs:

When poor elderly patients were moved from state-run Medicaid programs to the federal Medicare Part D prescription drug program, drug costs for those patients apparently soared by more than $2 billion as pharmaceutical companies pocketed windfall profits.

The difference is that where state programs have been negotiating for lower costs for patients, the Part D law barred the federal government from negotiating for lower prices-- a giveaway to big Pharma that couldl end up costing federal taxpayers big money.

To add insult to injury, the federal government is demanding payments from states based on "cost savings" from not paying for patients now transferred to Part D-- but states allege that the feds are wrongly assuming that the state Medicaid were paying Part D inflated drug costs and ignoring the savings negotiated by the states when they distributed prescription drugs.

Multiple states are now suing the federal government over the charges.

Posted by Nathan at July 18, 2006 08:06 AM