340bemployed.org

Your Free Source for 340B News and Commentary

  • Home
  • About Us
  • Employers
  • Job Seekers
  • Advertise
  • 340B Health

Study Suggests VA and DOD Could Negotiate Lower Drug Prices

DOD pays more per unit for generics while VA pays more for brands
 

Print Article

May 31, 2013—The Department of Veteran Affairs (VA) and the Department of Defense (DOD) are paying different prices for the same prescription drugs, the Government Accountability Office (GAO) has found. However, the findings may not be that surprising considering the purchasing patterns of the two agencies, GAO researchers found.[ms-protect-content id=”2799″]

Comparing the prices paid by the VA and DOD for 83 specific drugs during the first quarter of 2012, the May 20 study found that the DOD on average paid 31.8 percent ($0.11) more per unit than the VA. For 11 of the 83 drugs, one agency paid at least 100 percent more than the other agency.

Breaking down the numbers further, the study found that the DOD paid more per unit for generic drugs while the VA paid more per unit for brand-name drugs. Each agency obtained better prices on the type of drugs they used most. Generic drugs accounted for 83 percent of the VA’s utilization and brand-name drugs accounted for 54 percent of the DOD’s. “These results were consistent with each agency obtaining better prices on the type of drugs that made up the majority of its utilization,” the GAO found.

Nonetheless, there are lessons to be learned from the analysis, according to the GAO. “DOD and VA face continued challenges in controlling drug costs. While the prescription drug market is complex and there are many factors affecting the prices DOD and VA are able to obtain for directly purchased drugs, differences in prices paid for specific drugs may provide insights into opportunities for each agency to obtain additional savings on at least some of the drugs they purchase,” the study concluded.

The DOD’s generic drug utilization rate of 46 percent is well below the national average of 84 percent. But, the DOD noted that it obtains many brand-name drugs below the prices for generic equivalents.

The VA and DOD both purchase drugs directly from manufacturers via wholesale distributors called “prime vendors.” The agencies dispense these drugs to beneficiaries through their medical facilities and pharmacies, including their mail-order pharmacies.

Sen. Tom Coburn (R-Okla.), the ranking member of the Committee on Homeland Security and Governmental Affairs, requested the study. The GAO said it will compare drug prices paid using other approaches and by other federal programs, including Medicare and Medicaid, in future work. It did not say whether it will examine prices paid by 340B covered entities.[/ms-protect-content]

Follow us on X

340B Health Follow

340B Health is the leading advocate & resource for hospitals that serve their communities by participating in the 340B drug pricing program. #Protect340B

340BHealth
340bhealth 340B Health @340bhealth ·
9 Feb

We've arrived in San Diego for the 22nd Annual
@340BCoalition Winter Conference! Follow along for session snapshots, key takeaways, and community highlights throughout the week!
#340BConf #BecauseOf340B

Reply on Twitter 2020672291319718387 Retweet on Twitter 2020672291319718387 1 Like on Twitter 2020672291319718387 2 Twitter 2020672291319718387
340bhealth 340B Health @340bhealth ·
3 Feb

After a severe spinal cord injury, Herb Werner worried about affording meds — until MetroHealth’s pharmacy helped him access a 75% discount through the #340B program. Now he can focus more on living his best life. #Becauseof340B

Reply on Twitter 2018733474266427604 Retweet on Twitter 2018733474266427604 Like on Twitter 2018733474266427604 Twitter 2018733474266427604
340bhealth 340B Health @340bhealth ·
2 Feb

🏥 #Becauseof340B, safety-net providers can stretch limited federal resources further — improving access to affordable care, chronic disease management, mental health support, transportation, and more for patients and families in need. #CommunityHealth #HealthEquity

Reply on Twitter 2018427008707920357 Retweet on Twitter 2018427008707920357 Like on Twitter 2018427008707920357 Twitter 2018427008707920357
Load More

RSS 340B Informed

  • An In-Depth Look at Total 340B Purchases
  • Ideas for 340B Changes Could Lead to Legislation
  • Help From 340B After a Rare Diagnosis and an Unaffordable Bill

Copyright © 2026 · 340B Health