OBJECTIVES: To evaluate the impact of the Veterans Health Care Act in limiting the price of pharmaceutical drugs to 76% of the non-federal average manufacturer price for the Big four federal agencies (VA, Department of Defense, Coast Guard, and Public Health Services). METHODS: Estimated wholesale acquisition cost (WAC), used as a surrogate for the non-federal average manufacturer price, was obtained from First DataBank, while FSS price for the Big four federal agencies was obtained from the VA pharmaceutical benefit management. The federal discount was calculated as the ratio, Big four/WAC. Sub-analyses were also conducted for therapeutic classes consisting of only single-source products and for brand-name manufacturers with more than 100 products in the combined database. RESULTS: A total of 8877 unique products met the inclusion criteria for the study. The products belonged to 529 unique medication classes and were manufactured by 225 unique manufacturers. Nearly 94% of all the products had a Big four price less than 76% of the estimated WAC (mean±SD=50% ± 21%). Therapeutic categories with only one product on average had a 39% federal discount while therapeutic categories with more than six products received on average 51% federal discount. Discounts for single source products were lower than the entire basket of products. None of the manufacturers had a mean Big four price across all products more than the 76% of the estimated WAC, with the lowest being 47% and the highest at 63%. CONCLUSION: The results suggest that the Veterans Health Care Act was successful in limiting the price of pharmaceuticals to 76% of the estimated WAC. Further, it is also evident that firms had discounts larger than the mandated level.