Medicare pays more for drugs than Medicaid, report finds

Medicare pays much more for prescription drugs than Medicaid, according to a report from the inspector general of the Health and Human Services Department. 

The report says Medicaid rebates help keep prices low in the program.

Medicaid and Medicare plans paid roughly the same up-front costs for prescription drugs, the report says, but Medicaid got far more of its money back through rebates from drug manufacturers. The program recaptured about 45 percent of its drug spending, compared with roughly 19 percent for Medicare's drug benefit.

Many congressional Democrats want to expand Medicaid's drug rebates to cover people who are eligible for both Medicare and Medicaid. That proposal was floated during negotiations over the debt ceiling, but met strong resistance from the pharmaceutical industry and from Republicans.