Estimated to reach $15 billion by 2015, the Department of Defense's (DOD) prescription drug spending has been a growing concern for the federal government. The John Warner National Defense Authorization Act (NDAA) for Fiscal Year 2007 required GAO to examine DOD's pharmacy benefits program. Specifically, as discussed with the committees of jurisdiction, GAO examined DOD's prescription drug spending trends from fiscal years 2000 through 2006 and DOD's key efforts to limit its prescription drug spending. To conduct this work, GAO analyzed DOD's data on spending trends, including trends in beneficiary pharmacy use. GAO also assessed DOD's cost avoidance data and the agency's efforts to limit spending through its uniform formulary, which is a list of preferred drugs available to all beneficiaries. GAO interviewed DOD officials about these and other efforts to limit spending.
Recommendations for Executive Action
|Department of Defense||1. To help ensure the fiscal sustainability of DOD's pharmacy benefits program and complement more fundamental reforms recently enacted or recently proposed, the Secretary of Defense should direct the Assistant Secretary of Defense for Health Affairs to monitor the effect of federal pricing arrangements for drugs dispensed at retail pharmacies along with ongoing efforts to limit pharmacy spending to determine the extent to which they reduce the growth in retail pharmacy costs.|
|Department of Defense||2. To help ensure the fiscal sustainability of DOD's pharmacy benefits program and complement more fundamental reforms recently enacted or recently proposed, the Secretary of Defense should direct the Assistant Secretary of Defense for Health Affairs to identify, implement, and monitor other efforts, as needed, to reduce the growth in retail pharmacy spending.|