Drug Prices Rise Under Medicare Prescription Drug Plan

Democrats are looking closely at problems with the Medicare drug program including enrollment difficulties and delays in reimbursement to pharmacies. Perhaps the most alarming problem is the increase in drug prices since the plan began last month:

Prices for some of the most popular medicines used by seniors have jumped an average of 4 percent under the new Medicare drug benefit since it began last month, according to a report released on Tuesday.

The report, released by the Democratic staff of the House of Representatives Government Reform Committee, found prices for Pfizer Inc.’s pain reliever Celebrex, Merck Inc.’s cholesterol drug Zocor and eight other top drugs offered by 10 major plans rose during the controversial program’s first seven weeks.

In some cases, drug prices rose 10 percent, it also found. . .

Tuesday’s report found Caremark Rx Inc.’s Silverscript Plus plan raised prices 10.2 percent. Under Humana’s Standard PDP plan, prices rose 3 percent, while they rose 4 percent under AARP’s Medicare Rx plan.

Of the 10 plans reviewed, Avantra’s RX Premier plan was the only one to cut prices, an average of 1.1 percent.

A second report, also released by committee Democrats, found current prices offered by plans are higher than those offered during the last two years with Medicare’s temporary drug cards.

The plan has also been a financial windfall for the pharmaceutical industry as the majority of those who enrolled in the program are low income seniors who also have Medicaid. Many previously received their prescriptions through Medicaid programs which negotiated discount prices while the Medicare program is prohibited from obtaining such discounts. Many others who have enrolled previously received their prescriptions at no charge from the pharmaceutical companies through Patient Assistance Programs.

The big winners under the Medicare Part D program have been the pharmaceutical and insurance industries, both large contributors to George Bush. Insurance companies benefit from the subsidies paid to private insurance companies to cover Medicare patients in Medicare HMO’s, which typically cost more than the government program to provide health care coverage.