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Part D Negotiation Will Save Billions
By NCPSSM | October 29, 2009
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
Topics: Medicare, Part D, healthcare | Comments »