Tricare obtains lower prices on retail prescription drugs Published Aug. 5, 2009 By TRICARE FALLS CHURCH, Va. -- The Defense Department is projected to reduce spending by $1.67 billion on prescription medications sold in retail pharmacies in fiscal year 2010, following the full implementation of Section 703 of the National Defense Authorization Act (NDAA) for fiscal year 2008. "These are significant savings to the Department of Defense and are crucial to our effort to slow the rapid growth of pharmacy costs," said Rear Adm. Thomas McGinnis, chief of TRICARE pharmaceutical operations. For the past several years the Department of Defense (DoD) has paid commercial rates for prescription drugs purchased in the TRICARE retail pharmacy network. However, DoD is included in the 1992 Veteran's Healthcare Act as one of the "big four" government agencies entitled to federal prices when it purchases pharmaceuticals for its beneficiaries. DoD currently receives federal ceiling prices, the maximum price that can be charged for brand name drugs, in military treatment facilities and the TRICARE Mail Order Pharmacy. Through authority provided in Section 703 of the 2008 NDAA and the "final rule" implementing the regulation, DoD will now get these same discounts in the TRICARE retail pharmacy network. The final rule was effective May 26, 2009. Controlling the growth in pharmacy benefit costs for both the beneficiaries and the government is an ongoing process for TRICARE. Beneficiaries can sign up to get e-alerts for updates to their pharmacy benefit through the "email Updates" link on the front page of http://www.tricare.mil.