Wisconsin could save more than a billion dollars in the next decade if the federal government chooses to negotiate for lower Medicare drug costs, according to an economic analysis released during a conference call Wednesday.

Wisconsin will lose out on $1.2 billion in potential savings, and all 50 states combined could conserve almost $73 billion, according to Center for Economic and Policy Research Director of Domestic Policy Nicole Woo. Beneficiaries in Wisconsin could save $1.9 billion over this time period, she added.

Along withCEPR Co-director Dean Baker, Woo is the co-author of the issue brief report revealing these findings.

“Our budget deficit problems really are a health care cost problem,” Woo said. “It’s not due to government spending. It’s actually just due to the fact that our private health care sector has very high costs.”

Woo said state governments partially fund Medicare because they had to begin covering a portion of prescription drug costs in 2006 when Medicare Part D came into effect.

Robert Kraig, executive director of Citizen Action of Wisconsin,  the organization that led the conference call, said Wisconsin is forced to spend much of its own money from its own general purpose revenues because of the federal government’s failure to accomplish a better deal for prescription drugs.

“The federal government will not take the common sense step of using its buying power to negotiate better prices,” Kraig said. “We’re actually talking at the national level about undermining Medicare as we know it in order to deal with the deficit and the debt, instead of things that would not cut benefits in the least.”

Woo added through programs such as Medicare and Medicaid, the federal government pays about half the expenses of health care in America because they directly pay individual hospitals and doctors within a private system.

TheU.S.government’s refusal to negotiate with lucrative pharmaceutical companies is a leading reason why health care programs are so expensive in Wisconsin and the rest of the country, Woo said.

“Other developed countries around the world spend about half as much as per person on their health care, and most of them, or almost all of them, have higher life expectancies,” she said. “We really don’t get a good bang for the buck with our health care spending in this country.”

Woo cited Organisation for Economic Cooperation and Development numbers showing Canada spends only approximately 70 cents for each dollar theU.S.spends on prescription drugs, while the United Kingdom and Denmark spend less than 40 cents perU.S.dollar.

She added a country as large as theU.S.should have more leverage than the U.K., Denmark or Sweden to negotiate with pharmaceuticals for prices that better suit economies of scale and lower drug costs.

Sen. Jon Erpenbach, D-Middleton, said he was surprised by these figures. 

“The numbers obviously are staggering,” he said. “The amount of money that could be saved for the people of Wisconsin is astonishing.”

Erpenbach said the federal government could easily resolve this spending issue through theU.S.government’s buying power, rather than take the system of Medicare and “blow it out of the water,” as he said U.S. Rep. Paul Ryan, R-Janesville, recommends.

He added changing the way the government pays for Medicare drugs could be done almost immediately to create a positive impact on both federal and state levels.

“We could save a tremendous amount of money for everyone involved,” Erpenbach said. “When you say no to negotiating with pharmaceutical companies, for example, you’re saying no to something that would help cut the high cost of health care.”

Woo said twoU.S. Senators are creating a bill to allow government negotiation for these prescription drug prices and reduce Medicare costs, and legislation is also in the works in the House of Representatives.