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YOKOTA AIR BASE, Japan — U.S. civilians buying prescription drugs at on-base pharmacies likely got a little sticker shock last fall after the Department of Defense suddenly jacked the prices up.

Tricare Management Activity has raised pharmaceutical costs by an average of about 150 percent. The increases took effect in August.

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.

Col. Mark Presson, the command surgeon for U.S. Forces Japan and commander of Yokota’s 374th Medical Group, said Friday the government had to change its cost formula to the median price to more accurately mirror what it pays for the medication.

“DOD had to make it a cost more reflective of what people are paying in the United States,” he said.

Active-duty servicemembers, retirees and their dependents are not affected by the rate table change because their medications are covered by Tricare, said Maj. Dave Walmsley, a pharmacist and commander of the 374th Medical Group’s Diagnostic and Therapeutics Flight at Yokota Air Base, Japan. The change affects DOD civilians, contractors, Department of Defense Dependents Schools teachers and their dependents who are eligible to receive care at military treatment facilities.

Under the former policy, pay patients were charged only the lowest prices at which the government could buy drugs — even though it actually purchased the medicines at a range of prices, said Rear Adm. Tom McGinnis, chief of pharmaceutical operations for Tricare Management Activity.

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 no longer could 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 added.

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.

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 U.S. civilian employees.

“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 American retail pharmacies, such as CVS or drugstore.com, McGinnis said.

McGinnis said patients always should ask their doctors if they can take a generic version of a drug instead of a well-known — and invariably more expensive — brand-name drug.

Examples of new prices vs. old prices under revised pharmacy rate table:


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