In terms of Part B, commercial insurers play no role at all. What happens is the drug companies send in their sales to Medicare and they crunch an average price and pay that. Think of it as Medicare riding on the coattails of the commercial plans.
For Part D, I see your point, but research has found that the Medicare price that insurers negotiate for drugs is often less than what commercial plans pay, so they are doing a good job on behalf of Medicare.
One thing to keep in mind can you really call it a "negotiation" when one of the parties represents a sovereign entity? CMS (Centers for Medicare and Medicaid) gets even more discounts above what I described earlier. For example, the 340B discount knocks 23.1%+ right off the top. Same thing for Medicaid. There is no negotiation here, the gov't simply says, "we get this discount or we ban you from participating in public programs".
> One thing to keep in mind can you really call it a "negotiation" when one of the parties represents a sovereign entity?
Yes, sovereign entities negotiate all the time; being a monopsony is probably more relevant than being sovereign, but arguably only a monopsony can negotiate on fair terms with a monopoly supplier.
For Part D, I see your point, but research has found that the Medicare price that insurers negotiate for drugs is often less than what commercial plans pay, so they are doing a good job on behalf of Medicare.
One thing to keep in mind can you really call it a "negotiation" when one of the parties represents a sovereign entity? CMS (Centers for Medicare and Medicaid) gets even more discounts above what I described earlier. For example, the 340B discount knocks 23.1%+ right off the top. Same thing for Medicaid. There is no negotiation here, the gov't simply says, "we get this discount or we ban you from participating in public programs".