Across more than 1.4 billion Medicare Part D claims for 184 products, Medicare plans overspent by 13% in 2017 and almost 21% in 2018, compared to Costco member prices.

Costco has a reputation for low prices, on everything from bulk frozen food to 60-inch TVs, and even its phramacy. In many cases, Costco’s prescription drug prices are better than Medicare prices — suggesting that policymakers need to take a closer look at the practices that allow for intermediaries to negotiate drug prices on behalf of Medicare but don’t necessarily pass those savings on to beneficiaries and taxpayers.

That’s the takeaway by University of Southern California researchers who compared Medicare Part D prescription drug prices with those paid by Costco members and found that the federal government overpaid on roughly half of the most common generic medicines in 2018.


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