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Medicare pays more for drugs

Costco Wholesale Corp. and Drugstore.com may be negotiating lower prices from drug makers than leading Medicare drug plans, according to a Democratic report.

Costco and Drugstore.com customers pay 3 percent less for drugs such as Pfizer Inc.'s Lipitor than the average prices negotiated by 10 nationwide Medicare drug plans, the House Government Reform Committee's Democratic staff found. The differences are greater when Medicare prices are compared with what Canadians or US government agencies pay for medicines.

Representative Henry Waxman, a California Democrat, wants Medicare rather than insurers to negotiate prices with manufacturers. Such direct negotiation is banned by the law that created the Medicare drug benefit in 2003.

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