Lower drug prices for Medicare Part D: Health Affairs article offers
possibilities
Focusing on Secretary’s lack of negotiating power not the
solution, authors argue.
A number of mechanisms for lowering costs of Medicare’s Part D
prescription drug benefit could be implemented as part of health care
reform, according to an article recently published online by Health
Affairs. Authors Kevin Outterson, associate professor in the
Boston University School of Law, and Aaron Kesselheim, instructor in the
Division of Pharmacoepidemiology and Pharmacoeconomics in the Department
of Medicine at Brigham and Women’s Hospital and Harvard Medical
School in Boston, focused on pitfalls in worrying too much about an
often-criticized element in the Medicare Modernization Act of 2003 (MMA)
that forbids the Secretary of Health and Human Services from negotiating
directly with pharmaceutical manufacturers for lower prices.
Removing the noninterference language from the MMA so as to grant the
Secretary powers of negotiation is complicated by the way that Part D is
organized and is neither politically feasible nor a cost-savings
strategy that would have any real impact, the authors argued. “The
structure of Part D, replete with many private plans, poses difficult
administrative and practical hurdles to successful Federal price
negotiations,” they added.
The authors proposed that providing medications to low-income elderly
through Medicaid, rather than Medicare, is a better approach to reducing
drug prices. MMA lists Medicare as its primary drug prescription source
for Medicare and Medicaid eligibles—and since Part D drug prices
average about 30% higher than Medicaid prices, returning the 6.2 million
“dual eligibles” to Medicaid drug pricing could save as much
as $2.8 billion yearly, the article stated.
In addition, the authors examined “a menu of other options,
including value-based pricing; expansion of generic and therapeutically
equivalent substitution; increased formulary diversity; importation; and
limited antitrust waivers. These latter options may reduce federal
spending without direct government price negotiations.”
Related resources on www.pharmacist.com
Beth Farnstrom (bfarnstrom)
Posted August 6, 2009, 11:00 am EDT
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