A Dose of Reality on Part D

  • by: |
  • 11/06/2006
Today the New York Times invokes the myth that drug prices went up an average of 6 percent last year. I think that number comes from an AARP study conducted by the PRIME Institute which used manufacturer prices posted from July 2005 and June 2006.

Well, a little research goes a long way. Going to plans in my home state of NJ, If you look at some of the changes in Medicare part D prices for the Top 25 Brand Name Prescription Products over the same time period, you find that the retail prices have actually gone up slower (4.5 percent) under the AARP than manufacturer prices reported by its own study and out out of pocket share during the initial coverage level has declined by 12 percent! That suggests actual price concessions were deep and that therefore the 6 percent manufacturer price increase (the sticker price) was wishful thinking at best. Prices during the gap under the Humana plan decreased by 4 percent a year and the out of pocket costs during coverage have dropped as well.

And in all cases the retail price of the drug is cheaper than what seniors could get a drugstore.com.

Moving over to the VA model is to see that drugs such as Aricept, Abilify, Evista, Fosamax, Lipitor and Xalatan are not on the VA formulary while they are on the Medicare Part D formulary.

That's just for starters. Which explains why nearly 35 percent of VA seniors tried to join Medicare part D.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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