Retail News Breaks
Drug makers agree to Medicare Part D discount
June 21st, 2009
Billy Tauzin, PhRMA
WASHINGTON – In the latest advance toward health care reform, drug manufacturers plan to offer about $80 billion in prescription discounts to Medicare recipients, according to published reports.
Under a deal announced Saturday, pharmaceutical companies have agreed to halve the cost of brand-name drugs covered by a Medicare beneficiary's Part D plan when the medicine is purchased in the coverage gap, known as the "doughnut hole."
The agreement, applauded by President Obama as helping to further health care reform, reportedly was negotiated between the Pharmaceutical Research and Manufacturers of America (PhRMA) and Sen. Max Baucus (D., Montana), who is leading one of the congressional panels that is crafting health care legislation.
"PhRMA is committed to working with the administration and Congress to help enact comprehensive health care reform this year. We share a common goal: Every American should have access to affordable, high-quality health care coverage and services," PhRMA president and chief executive officer Billy Tauzin and chairman David Brennan said in a statement about the deal.
“As part of that reform, one thing that we have agreed to do is support legislation that will help seniors affected by the coverage gap in the Medicare prescription drug benefit," they said. "Although the program has been a tremendous success for the vast majority of seniors, the coverage gap has posed a challenge to some seniors, and our companies have been exploring ways to address this issue for several years."
According to PhRMA, under the proposed legislative program, pharmaceutical companies will provide a 50% discount to most beneficiaries on branded medicines covered by a patient’s Part D plan when bought in the doughnut hole.
What's more, the negotiated price of the Part D-covered drug purchased in the coverage gap would count toward the patient's out-of-pocket costs, thereby reducing their total out-of-pocket spending, the association said.
“Since its inception, strong competition among drug plans participating in the Medicare drug benefit has led to significant savings for seniors," Tauzin and Brennan stated. "On average, beneficiaries are saving $1,200 annually on their medicines, and the average low-income beneficiary saves $3,900, according to the Centers for Medicare and Medicaid Services. This agreement will help to provide additional savings to even more seniors across the nation."
More Retail News Breaks >>