Private Medicare Drug Plans: High Expenses and Low Rebates Increase the Costs of Medicare Drug Coverage

Publication

Private Medicare Drug Plans: High Expenses and Low Rebates Increase the Costs of Medicare Drug Coverage

Abstract

The Committee on Oversight and Government Reform investigated the proprietary cost and pricing data in the Medicare Part D program. To gather this data, the committee analyzed multiple administrative expenses, sales costs, profits, and drug rebates from 12 leading insurers who offer Medicare and Medicare Advantage. The main findings from this investigation show that Part D insurers: have high administrative expenses, have not negotiated with drug manufacturer rebates, have been receiving rebates on drug purchases, have created a formula that makes beneficiaries and taxpayers victims to price increases, and do not have a clear stance on generic drugs.