Big Pharma Jacks Up Drug Costs in Advance of Health Care Reform

Well, whaddaya know! Just as Congress is winding up its big health care “reform”–which among other things promises to plug the “doughnut hole” coverage gap in Medicare’s prescription drug program–prices of drugs for the oldsters are reaching new heights.

It’s been clear for some time that Big Pharma has been jacking up drug prices in preparation for any new regulation that might come out of the health care reform. Last November, the New York Times was reporting that drug prices had already increased so much that they raised the nation’s total health care costs by some $10 billion.

New details on the rise in prices for the drugs most commonly used by elders come from a report by the Kaiser Foundation, which finds that “Between 2009 and 2010, monthly prices in the coverage gap increased by 5 percent or more for half of the top ten brand-name drugs.”

The study notes:

A unique feature of the Medicare Part D drug benefit is the coverage gap, or so-called “doughnut hole,” where Part D enrollees are required to pay 100 percent of total drug costs after their spending exceeds the initial coverage limit, before qualifying for catastrophic coverage. The coverage gap in the Part D standard benefit is $3,610 in 2010 and is projected to increase to $5,755 by 2018, under current law. the coverage gap are likely to have multiple chronic conditions and take either several medications or a smaller number of relatively expensive brand-name drugs. An estimated 3.4 million Part D enrollees (14 percent of all enrollees and 26 percent of those using prescription drugs and not eligible for the low-income subsidy) reached the coverage gap in 2007. 

For example, an older woman taking Actonel for osteoporosis, Aricept formemory loss, and the blood thinner Plavix would spend $448 per month in 2010 after she reached the gap (in roughly six months), and would remain in the gap for the rest of the year, assuming no changes in her drug regimen. Between 2009 and 2010, her total monthly out-of-pocket costs in the gap for these three drugs would have increased by 7 percent (from $417 to $448) – at a time when Part D premiums also increased and there was no increase in Social Security payments.

So let’s see: The cost of drugs is rising (with many brand name drugs not covered by Medicare drug plans–or covered with a co-pay of $50, $75, or more). Medicare Part D premiums are going up sharply, as well, since the insurance companies have to make sure they still get their share. And Social Security payments are remaining the same, with no cost of living increase.

It’s great that health care reform may close the doughnut hole–but at this rate, some old people won’t be able to afford their medication, gap or no gap. And let’s not forget that the government subsidizes Part D, so old folks are getting screwed as taxpayers, as well as “beneficiaries.”

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