Tricare: U.S. lost money by filling civilians’ prescriptions
January 15, 2007
RAF LAKENHEATH, England — Customers buying prescription drugs at on-base pharmacies may have gotten a rude shock last fall when they looked at the prices.
With no warning, Tricare Management Activity raised prices an average of 150 percent.
The government hadn’t been charging pay patients enough for prescription drugs and was losing money selling them, according to officials from Tricare Management Activity who oversee the supply of medication to military hospitals.
Active-duty servicemembers are not affected by the change because their medications are covered by Tricare.
Under the old policy, pay patients were charged only the lowest prices the government could buy drugs for — even though it actually purchased the drugs at a range of prices, said Rear Admiral Tom McGinnis, chief of pharmaceutical operations for TMA.
The government buys the antihistamine Claritin, for example, from vendors for as little as 6 cents to as much as 76 cents per pill, according to RAF Lakenheath pharmacist Lt. Col. Ricardo Garcia. For a 30-pill bottle, that would mean $1.80 versus $22.80 for a bottle of caplets, though a pay patient could always buy it at the low end.
Officials saw a need to raise the rates for the August revision of the pharmacy rate table. Pharmaceutical prices in the U.S. had risen substantially, and the government could no longer afford to allow pay patients to buy drugs at cost, McGinnis said.
The market has seen “double-digit price increases” in a trend that’s “not going to end anytime soon,” he said.
To recoup the cost, Tricare changed its policy to have pharmacies charge the median price at which it purchases medicine, raising charges across the board.
“We still don’t get everything we’re supposed to be getting … [but] we’re probably close,” McGinnis said.
He said the next time, Tricare would give consumers warning about price increases, which this time went into effect at the end of August.
From 2005 to 2006, he said, Congress’ allotment for Tricare to buy drugs for servicemembers and their dependents rose from $5.4 billion to $6.1 billion.
That money was not supposed to include nonservicemembers such as Department of Defense Dependents Schools teachers.
“We’re supposed to bill at a reasonable cost to recoup our cost” from those patients, McGinnis said.
Even so, the military’s prices are lower than those at major stateside retail pharmacies, such as CVS or drugstore.com, McGinniss said.
But with the weak U.S. dollar, the rate increase sent some patients running. In Lakenheath, Garcia said many patients have switched over to other sources of medication.
“Some are saying now they’re getting their prescriptions sent off to mail-order [services],” he said.
McGinnis said patients should always ask their doctors if there is a generic version of a drug they can take instead of a well-known — and invariably more expensive — brand-name drug.
Drug name Dose per tablet High End military cost Low end military Cost Walgreens drugstore.com
Prozac 30 40mg tablets $173.00 $24.00 $295.99 $278.96
Amoxicillin 30 500mg tablets $14.10 $1.80 $12.99 $8.00
Claritin 30 10mg tablets $23.00 $1.80 $22.99 $22.99
Sources: RAF Lakenheath Medical Center, Walgreens, drugstore.com