OBJECTIVES: A solution to mitigate patient cost-sharing in Medicare Part D, while maintaining budget neutrality for the federal government, would be for all federal agencies to purchase medications as one entity, paying the same price for each medication, and use this price to determine cost-sharing in Part D. The objective of this study is to estimate the effects of a budget-neutral consolidated purchasing scenario on cost-sharing of Part D beneficiaries. METHODS: The Medicare price and out-of-pocket payments for brand-name drugs that accounted for greater than 50% of Part D spending were extracted from Part D claims data. The VA and DoD prices for the same drugs were calculated using discount rates estimated by the CBO. To determine the combined utilization across Medicare, VA and DoD, we summed total spending from these agencies and divided it by the utilization-weighted average unit price. The agency-specific spending was then calculated by multiplying current spending by the ratio of the consolidated purchasing weighted average price to the current price from each agency. We conducted descriptive analyses of the changes in prices and cost-sharing under this scenario. RESULTS: The utilization-weighted average unit prices for the basket of drugs were $7.31 for Medicare, $4.75 for VA, and $5.00 for DoD. Using a weighted average unit price of $6.98 for all agencies, consolidated purchasing would decrease Part D spending by $3.52 billion. Spending would increase at the same amount for the other two agencies combined. The advantage of consolidated purchasing is that cost-sharing for Part D beneficiaries is reduced by $246.0 million. For beneficiaries in the catastrophic coverage phase, consolidated purchasing would represent yearly savings of $256 (median) and $489 (99^th percentile). CONCLUSIONS: A budget-neutral consolidated purchasing scenario would have no financial impact on overall government spending or VA and DoD enrollees but would reduce cost-sharing for the average Medicare beneficiary.