US DoD Trying to Slow Ballooning Prescription Drug Costs

The US Department of Defense’s prescription drug spending alone is estimated to reach $15 billion by 2015. GAO examined DOD’s prescription drug spending trends from fiscal years 2000 – 2006 and DOD’s key efforts to limit its prescription drug spending at retail pharmacies, military treatment facilities (MTF), and the TRICARE Mail Order Pharmacy (TMOP). That spending more than tripled to $6.2 billion in 2006 from $1.6 billion in fiscal year 2000, and retail pharmacy spending drove most of this increase with a $3.4 billion. Part of the issue is that more people arer using more costly retail pharmacies instead of MTFs or mail order, and so the US DoD has used a variety of techniques to try and slow that cost growth.

Report #GAO-08-327, “DOD Pharmacy Program: Continued Efforts Needed to Reduce Growth in Spending at Retail Pharmacies,” goes into more detail regarding these issues, and the solutions being tried, from pharmacy rebates, to outreach efforts like the Member Choice Center, to initiatives aimed at changing copayment policies to provide the right incentives. See also “TRICARE Trials & Tribulations,” which places prescription drug costs within a much larger issue of US military medical costs more generally.