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Medicare: Beneficiaries' Prescription Drug Coverage

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Report Type Reports and Testimonies
Report Date Sept. 28, 1999
Report No. T-HEHS-99-198
Subject
Summary:

In deliberating Medicare and the rising availability, cost, and use of prescription drugs, Congress faces a policy dilemma: The lack of a prescription drug benefit may impede beneficiaries' access to treatment advances while adding that benefit could be costly to the program. One possible resolution would be to model the benefit after Medicaid's drug rebate program; price discounts could be substantial, but beneficiaries would have no incentive to make cost-conscious decisions about drug use. Another possible resolution would be to do what the private sector does in negotiating price discounts from manufacturers in exchange for shifting market share. However, Medicare's using pharmacy benefit managers to process claims, negotiate with manufacturers, establish preferred drug lists, and develop beneficiary incentives for controlling spending would be difficult because of the program's size, need for transparency, and imperative for equity.

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