Prescription Drugs - Medicine & Money
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Medicare Part D
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[click here]Lower "Rebates" from Pharmaceutical Manufacturers Causing Higher Medicare Part D Costs
May 14, 2007
Prices under Medicare prescription drug plans for 10 of the most prescribed brand-name medications have increased 6.8 percent since December 2006, while wholesale prices for the same drugs have increased 3 percent, according to a House Oversight and Government Reform Committee report, the Washington Post reports. Previously, Medicare actuaries had projected that drug prices would increase by 7 percent over the entire year.
According to the report, insurance companies that offer Medicare drug plans likely will negotiate rebates from pharmaceutical companies that amount to 4.6 percent of total drug costs this year, compared with 5.2 percent last year. Medicare actuaries previously had estimated insurers in 2007 would obtain rebates of 6 percent.
According to the Post, a reduction in discounts from 6 percent to 4.6 percent over 10 years would result in about $17 billion in unanticipated prescription drugs costs for beneficiaries and taxpayers, with all of the additional money going to drug companies. In addition, committee investigators found that premiums for Medicare drug plans have increased by 13 percent since the prescription drug program went into effect last year.
The Post reports that the impact of the data on seniors is "not completely clear" because most who have enrolled in the program have selected plans with low deductibles, so they would not "see the full impact of drug price increases" until they hit the plan's coverage gap.