Technical Report 48: VA Pharmacy Operations Under the VA MISSION Act: An Economic Overview

Todd H. Wagner, PhD,¹ Jolynn Knoche Sessions, PharmD, BCOP, CPP, FHOPA,² Anne Lord Bailey, PharmD, BCPS³, Greg J. Downing, DO, PhD⁴

¹Todd H. Wagner is the Director of the Health Economics Resource Center, Co-Director of the Center for Policy Evaluation. VA Palo Alto Health Care System. Professor, Stanford University.

²Jolynn Sessions is an EXCLAIM Pharmacogenomics Clinical Pharmacist Practitioner and Oncology Clinical Pharmacist Practitioner at the Western North Carolina Veterans Affairs Health Care System and Charles George Department of Veteran Affairs (VA) Medical Center in Asheville, North Carolina.

³Anne Lord Bailey is the Executive Director, Strategic Initiatives Lab, Digital Health Office, Veterans Health Administration.

⁴Greg Downing is Senior Advisor to VHA. Washington DC. Adjunct Professor, Georgetown University.

Suggested Citation

Wagner, TH, Sessions JK, Bailey AL, Downing GJ. VA Pharmacy Operations Under the VA MISSION Act: An Economics Overview. Technical Report 48. Health Economics Resource Center, VA Palo Alto Health Care System, U.S. Department of Veterans Affairs. May 2026.

 

1. Introduction

The US Department of Veterans Affairs (VA) has a reputation for running a highly efficient Pharmacy Benefits Management (PBM) service that helps clinicians prescribe evidence-based treatments while simultaneously working to ensure VA has favorable pricing.^1,2 Historically, Veterans were able to receive medications from non-VA pharmacies for specific pre-authorized care. The VA Maintaining Internal Systems and Strengthening Integrated Outside Networks (MISSION) Act of 2018 expanded Veterans’ access to care, including access to VA-paid medications from non-VA pharmacies. Since 2018, Veterans can receive up to 14 days of medication from community-based pharmacies in emergency medical situations, with prior authorization, or when geographical barriers prevent reasonable access to VA pharmacy services. The MISSION Act effectively places VA “at risk” for any medications that Veterans receive during this 14-day window. In this brief report, we compared VA-paid pharmacy claims to VA-provided pharmacy claims. The objective was to understand what kinds of medications patients were receiving from the community and the financial risk that VA needs to manage.

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2. Methods

Data

Claims for community-filled prescriptions are transmitted to the Veteran's assigned VA facility. The VA processes the claims for payment through the Community Care Reimbursement System (CCRS) or the Electronic Claims Adjudication System (eCAMS). We extracted all pharmacy claims from eCAMS and CCRS for fiscal year 2024.

We sorted the data by National Drug Code (NDC), merging community pharmacy payment data with VA drugs listed in the Managerial Cost Accounting pharmacy database. Both payment amounts include medication costs and dispensing fees. We collapsed the data to the NDC level, identifying for each NDC the number of prescriptions written and the average cost/payment.

We estimated hypothetical savings as: [(number of community prescriptions × average community payment) - (number of community prescriptions × average VA cost)]. Finally, we linked the dataset with FDA data using the NDC to identify therapeutics with an indication or usage in oncology.

Analysis

We conducted descriptive analyses. VA regulations prohibit the disclosure of VA pricing at the NDC level, so we summarized or redacted information as appropriate to protect sensitive data.

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3. Results

In fiscal year 2024, the VA processed payments for 1.44 million prescriptions filled at non-VA pharmacies at a cost of approximately $348 million. The median payment was $11, but the distribution of costs was highly right-skewed, with a mean payment of $276 per prescription. The most expensive individual prescription payment was for vutrisiran, which is used to treat polyneuropathy. 

In FY 2024, 13 medications were prescribed more than 10,000 times from non-VA pharmacies. Table 1 shows the top 20 most frequently prescribed medications, as listed by NDC, along with the average and maximum payment, whether they are available as a generic, and whether they are used in acute situations. Ten of the top 20 medications are often used in an acute medical situation, in which a prescription from a non-VA pharmacy might be clinically appropriate. However, 10 of these medications are frequently used in chronic disease management. We also observed considerably higher average and maximum payments for branded therapeutic products, as compared to medications for which a generic exists.

Table 1. Top 20 Most Frequently Prescribed Medications from non-VA Pharmacies

Estimated Savings

For every NDC analyzed, the average VA cost was lower than the average payment made to non-VA pharmacies. A biologic oncology medication used to treat diffuse large B-cell lymphoma [name and NDC withheld] was associated with the largest differential between VA cost and non-VA pharmacy payments. If the VA could find a way to provide that medication at VA facilities, it would save approximately $19 million annually.

Of the top 40 medications associated with the largest potential savings, 33 were used in oncologic treatment and many were biologics (monoclonal antibodies). In total, the VA could save a hypothetical $270 million if all medications filled by non-VA pharmacists were instead filled by VA, with most of that savings ($201 million, or 74%) linked to these top 40 medications.

Prescribing Behavior

Many medications come in various formulations, each represented by a different NDC. For some medications, VA and non-VA pharmacists experience similar prescribing patterns, while for others, patterns diverge considerably.

Acetaminophen: This commonly used analgesic and antipyretic (fever reducer) is available as an injection, oral tablet, and combination tablet with hydrocodone. When VA prescribes acetaminophen, it uses a generic 325mg tablet 75% of the time. This same NDC is used 62% of the time in non-VA pharmacies. VA uses injections in 12% of acetaminophen prescriptions, while non-VA pharmacies dispense this formulation 22% of the time. Finally, VA rarely uses acetaminophen with hydrocodone (<1% of acetaminophen prescriptions) while this combination is more commonly prescribed outside of VA (12% of acetaminophen prescriptions).

Albuterol: This asthma medication was associated with 17 different NDCs in 2024. VA concentrated utilization among three NDCs at 24%, 20%, and 18% of albuterol prescriptions. Non-VA pharmacies also relied largely on three NDCs when dispensing albuterol, however, they used different NDCs than VA.

Both acetaminophen and albuterol highlight the large variation in practice patterns between VA and non-VA pharmacies. In both cases, the potential savings from reducing this variation is relatively small.

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4. Discussion

VA's Pharmaceutical Pricing Advantage

VA achieves lower drug prices through a combination of statutory pricing protections, aggressive formulary management, national contracting strategies, and evidence-based utilization controls. VA is entitled to a mandatory rebate of at least 24% off the average manufacturer price for branded drugs, establishing a ceiling, and³ VA can then negotiate to obtain prices below that ceiling. VA also receives mandated rebates through the Federal Supply Schedule (FSS) program and uses its formulary, created in 1997 and managed by a Medical Advisory Panel, regional leads, and the PBM Strategic Healthcare Group, to steer VA providers to prescribe specific drugs.² These drugs are chosen based on safety, efficacy, and cost-effectiveness evidence.⁴ The data from FY2024 confirm that VA maintains a pricing advantage. For every NDC, the average cost was lower in VA than the average payment to the non-VA pharmacy.

MISSION Act Implementation and Financial Implications

The MISSION Act enables eligible Veterans to obtain VA-paid prescriptions from non-VA pharmacies with up to a 14-day supply. This policy was designed to balance improved access to care while limiting financial risk. When VA purchases prescriptions from non-VA pharmacies, it pays the billed amount, which can be considerably higher than VA's internal pricing.

Our analysis compared VA pharmacy costs to non-VA pharmacy payments from fiscal year 2024. Although VA's costs are universally lower than payments to non-VA pharmacies across all NDCs analyzed, this notable variation can be managed.

In the short term, VA should develop a real-time utilization management and prior authorization system to ensure that VA is limited to paying for non-VA pharmacies only when appropriate. First, VA should target prescriptions for brand-name medications for chronic disease management. As shown in Table 1, apixaban is commonly prescribed at non-VA pharmacies, and VA should work to ensure that veterans who need a direct oral anticoagulant (DOAC) are receiving services through VA. Second, VA should target non-branded medications for chronic disease management. Although the potential savings is less than it would be for branded medications, VA could still see notable return. Finally, VA should focus on high-cost medications, especially monoclonal antibodies and intravenous (IV) chemotherapy. VA should guide those patients to receive care at VA, whenever possible.

In the longer term, VA should continue to explore the development of care models that expand VA’s geographic footprint so that it can administer monoclonal antibodies and IV chemotherapy at VA facilities or VA-contracted infusion centers. Programs such as the National TeleOncology Program and Close to Me aim to provide world-class care closer to the Veteran’s home. Continued support, resources and expansion of such programs will benefit both Veterans and the VA. Additionally, focused personnel to actively review non-VA infusion therapies (such as biologics and chemotherapy) in real time could intervene and ensure veterans are getting optimal care at the optimal level and location. Although focusing on the top 40 drugs could potentially save $200 million annually, savings will depend on the cost of implementing new care models. In some situations, setting up a care model may be more expensive than the potential savings.

Limitations

This analysis has several limitations. First, we could not assess clinical appropriateness of non-VA versus VA pharmacy utilization; some prescriptions filled by non-VA pharmacists may be clinically necessary despite higher costs. Second, our savings estimates assume VA could feasibly provide all non-VA filled prescriptions, which may not be operationally realistic given capacity constraints. Third, we did not account for potential implementation costs of utilization management or new care delivery models. Finally, Veterans' preferences and experience of care were not measured but are important considerations for any policy changes.

Conclusions

VA's pharmaceutical pricing advantages result in substantially lower costs compared to non-VA pharmacy payments across all medications analyzed. While the MISSION Act expanded access to non-VA pharmacy services, the $270 million in potential annual savings—concentrated in high-cost biologics and oncology medications—warrants attention and possibly targeted interventions. Enhanced utilization management, real-time monitoring, and strategic expansion of VA's capacity to deliver high-cost infusions represent opportunities to achieve cost savings while maintaining or improving access and quality of care for Veterans. We recommend the VHA consider convening a working group to explore next steps for managing how Veterans access pharmaceuticals in the community.

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5. References

1. Subramaniam V, Valentino MA. Department of Veterans Affairs Pharmacy Programs. In: Pharmaceutical Public Policy. CRC Press; 2016. p. 457–78.
2. Huskamp HA, Epstein AM, Blumenthal D. The Impact Of A National Prescription Drug Formulary On Prices, Market Share, And Spending: Lessons For Medicare? Health Aff (Millwood) 2003;22(3):149–58.
3. Kesselheim AS, Avorn J, Sarpatwari A. The high cost of prescription drugs in the United States: origins and prospects for reform. JAMA 2016;316(8):858–71.
4. Aspinall SL, Good CB, Glassman PA, Valentino MA. The evolving use of cost-effectiveness analysis in formulary management within the Department of Veterans Affairs. Med Care 2005;43(7):II–20.

Acknowledgements

This work was supported by Merit Review Award Numbers RCS-17-154 and EBP-22-108 from the United States (U.S.) Department of Veterans Affairs HSR and QUERI Service. The funders of the study had no role in the study design, data collection, data analysis, data interpretation, or writing of the report. The views expressed in this article are those of the authors and do not represent the views of the U.S. Department of Veterans Affairs or the U.S. Government.

Last Updated Date: June 8, 2026

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