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Posts Tagged 'Part D drug negotiation'

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High RX Drug Prices Certainly Not News to Seniors

While Turing Pharmaceuticals Martin Shkreli’s decision to raise the cost of a drug 5,000% certainly got a lot of attention earlier this year, the fact that the high cost of prescription drugs in America continues to soar beyond the reach of many isn’t news to anyone who’s made a trip to the pharmacy lately.  In fact, a Kaiser Family Foundation poll found a large majority of the public (72%) view the cost of prescription drugs as unreasonable.

The federal Health and Human Services Department has signaled they’re looking for a way to curb rising prescription drug prices.  They need to do so because rising drug costs have now overtaken a long stretch of stable premiums.  In other words, while Medicare has successfully controlled premiums those successes are lost when seniors in Part D continue to face growing prescription costs. 

“Andy Slavitt, acting administrator for the Centers for Medicare and Medicaid Services, said his agency spent $140 billion on prescription drugs and that spending on medicines increased 13 percent in 2014 while overall health spending grew 5 percent.” ....HHS Airs Concerns About Rising Drug Prices, Congressional Quarterly

“Spending on medicines increased 13 percent in 2014, compared to 5 percent for health care overall, Slavitt said. It was the highest rate of drug spending growth since 2001.”...Obama administration sets stage for a debate on drug costs, Associated Press

One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.

“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,” NCPSSM Issue Brief

It’s time to hold America’s drug makers accountable. 

“Heather Block, a breast cancer patient from Lewes, Delaware, told the forum that her costs have been so high she could face bankruptcy if she beats the odds against her advanced disease. ‘Innovation is meaningless if nobody can afford it,’ she said”... Associated Press


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Negotiating for Lower Drug Costs in Medicare Part D

USA Today has a must-read editorial supporting our position that Medicare should be allowed to negotiate with drug-makers for lower prescription drugs, just as the Veterans Affairs department currently does.

“Part D already costs about $80 billion a year and is on track to double by 2022 as benefits improve and Baby Boomers retire. For two reasons, a significant chunk of that money is wasted on overpayments to drug companies: When Part D began, millions of patients were shifted over from Medicaid, the state-federal program for low-income people that gets far lower drug prices than Medicare. Suddenly, the cost of providing drugs to the same people shot up. Congress barred Medicare from negotiating the way Medicaid and the Department of Veterans Affairs do with drug makers to get lower prices. Instead, lawmakers insisted the job be done by private insurance companies.”

The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident.  The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D.  Even some Republican House members (this was a GOP sponsored bill), including Rep. Walter Jones from North Carolina and Rep. Dan Burton from Indiana, were aghast at the whole process:

"The pharmaceutical lobbyists wrote the bill," says Jones. "The bill was over 1,000 pages. And it got to the members of the House that morning, and we voted for it at about 3 a.m. in the morning," remembers Jones.

Why did the vote finally take place at 3 a.m.?

"Well, I think a lot of the shenanigans that were going on that night, they didn't want on national television in primetime," according to Burton.

Unfortunately not much has changed since 2003.  Roll Call has this wrap-up of what drug companies spent during the last quarter alone on lobbying Congress:

Five pharmaceutical companies have reported million-dollar increases in their spending on lobbying the federal government during the first quarter of 2014. Pfizer Inc., Novartis, Johnson & Johnson Services, Bayer Corporation, and Merck & Company have each boosted their lobbying of the executive and legislative branches.

Here are the top pharmaceutical spenders in the first quarter of 2014:

Pharmaceutical Research & Manufacturers (PhRMA) $4,680,000 – up from $4,050,000 in 2013 Q4.

Pfizer Inc. $3,190,000 – up from $2,090,000.

Novartis $2,580,000 – up from $920,000.

Amgen USA Inc. $2,560,000 – up from $2,330,000.

Eli Lilly & Co. $2,086,000 – down from $2,430,000.

Johnson & Johnson Services $2,110,000 – up from $860,000.

Bayer – $2,040,000, up from $1,000,000.

Merck & Co. $2,000,000 – up from $820,000

These are the same companies which claim any attempts to rein in their overpayments in Medicare will kill their research and development of new drugs:

“The drug companies say they must impose higher prices in the U.S. to pay for research that enables them to innovate and develop new drugs that save our lives. But that’s not true. Half of the scientifically innovative drugs approved in the U.S. from 1998 to 2007 resulted from research at universities and biotech firms, not big drug companies, research shows. And despite their rhetoric, drug companies spend 19 times more on marketing than on research and development.”  Healthcare for America Now

Meanwhile, in their opposing USA Today editorial big Pharma also argues that people like Part D so it shouldn’t be changed and, by the way, prescription drugs help people stay healthy.

“Surveys show 90% or more of Part D enrollees are satisfied with their coverage and say it works well. The use of medicines under Part D also helps to reduce spending on other health care services in Medicare, a fact that was recently acknowledged by CBO.”

Of course, access to prescription drugs helps people stay healthy but what does that have to do with whether or not Medicare should be forced to overpay for those drugs? Naturally, seniors like Part D.  Why wouldn’t they when before its passage they had absolutely no drug coverage?  That doesn’t mean Americans support paying more than they, or the government, should in order to pad drug makers’ pockets.  

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Part D Negotiation Will Save Billions

The House’s proposed health care reform bill (a merged version of three earlier House bills) has been unveiled today.  Newsweek’s The Gaggle blog has an early review of the main provisions: 

  • The change that will perhaps have the most impact on Americans is the expansion of Medicaid. Under Pelosi's bill, anyone earning up to 150 percent of the poverty line will be eligible for Medicaid. This is an increase on previous iterations─and the Senate bill─which only covered people up to 133 percent of the poverty line.
  • The bill includes a public option but not the so-called robust plan. Hospitals and providers will be able to negotiate their rates with the government insurer.
  • A surtax will be leveled on wealthy Americans─those earning over $500,000 for individuals or $1 million for families─to help offset costs. This differs from the Senate bill which relies on a tax on "Cadillac," or expensive, insurance plans. Medical-devices companies will also be subject to a new tax.
  • The bill removes the health-insurance industry's exemption from antitrust laws, which will no doubt upset insurers.
  • Like her Senate colleagues, Pelosi won't be offering a "doc's fix," that is, she won't offer a long-term solution to a problematic Medicare formula that causes reimbursement rates for physicians treating Medicare patients to decrease.
  • Medicare expenditures will be cut by approximately 1.3 percent, with the pharmaceutical industry bearing the brunt.
One issue important to seniors is the provision that allows Medicare to negotiate for lower drug prices in Part D (which is included in the House bill but not the Senate Finance plan).  We’ve released a new report today, Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,  detailing the $24 billion in savings possible if Medicare was allowed to negotiate drug costs.  That savings would be more than enough to close the Part D coverage gap known as the “doughnut hole” and address other deficiencies in the Part D plan.  Our report also shows that seniors in Medicare are currently paying up to twice as much for drugs as veterans who receive their coverage from the VA, which does allow negotiation for the lowest costs. We’ve compared the lowest prices obtained by private Part D plans for the top ten prescribed drugs with prices obtained by the VA for the same drugs.  The VA savings were substantially greater for all ten drugs; Amlodipine Besylate, Furosemide, Lipitor, Lisinopril, Hydrocodone, Atenolol, Levothyroxine NA, Hydrochlorothiazide,  Metroprolol Tartrate, Metformin HCL.  For example: 
  • Part D plans spend 99.7% more than the VA for the generic form of the hypertension drug Norvasc (amlodipine besylate).
  • Part D plans spend 64% more than the VA for the generic form of the most commonly filled Part D prescription, Lasix (furosemide).
  • Part D plans spend 28.5% more for the heart disease drug, Lipitor, than the VA.
 “This report shows that allowing price negotiation in Part D is a win-win proposition for Medicare and seniors because it shifts the focus back to providing the best prices to government and its beneficiaries rather than boosting industry profits.  It’s clear we can find health care reform savings in Medicare without cutting benefits; however, drug makers and insurers have a vested interest in protecting the status quo.  Reforming Part D must be a part of any final health care bill and allowing price negotiation is a critical part of that reform.”...Barbara B. Kennelly, President/CEO 

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House Health Care Reform and Medicare

We've now got specifics from the House on their version of health care reform legislation. The National Committee has worked hard to mobilize support for Medicare proposals that would improve efficiency and care for millions of Medicare beneficiaries while also providing savings for system-wide health care reform efforts. As President Obama has said, America does not face an entitlement crisis; we face a health care crisis.  That's why we believe it is imperative that health reform addresses cost growth throughout the entire health care system, not simply in the Medicare program.  Here's Barbara's statement from late Friday night after the Energy & Commerce committee vote:

"American seniors have a lot at stake in this health care reform debate and the National Committee applauds the House for taking an important first step in reforming our health care system for Americans of all ages.  The three Committee bills reported out of the House include several important reforms for Medicare beneficiaries such as, closing the Part D doughnut hole, allowing government negotiation of drug prices in Part D and eliminating billions of dollars of wasteful subsidies to private insurers in Medicare. But there is more work to be done to ensure the final health care reform package sent to the President  provides improved access and care to the insured, the uninsured, and beneficiaries in Medicare." Barbara B. Kennelly, President/CEO

Next up, we should see the Senate Finance Committee version of health care reform and it will undoubtedly look alot different than what we've seen in the House. Meanwhile, we'll keep urging Congress to support meaningful health care reform legislation, which protects Medicare's 44 million beneficiaries while also improving care and access for all Americans.

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