Health care reform concessions from drugmakers, which led to discounts of 50 percent on prescription drugs, have saved Medicare beneficiaries $38 million dollars in just the first two months of the year, the Department of Health and Human Services is reporting. For Part D beneficiaries, the savings averaged $800 on out-of-pocket costs, while for the approximately 11,000 with very high drug costs, the savings averaged $1,775. Nearly 50,000 beneficiaries received the average savings, and millions more are expected to see savings through the end of the year.
In addition to drug discounts, 3.8 million beneficiaries have received a one-time payment of $250 to help offset their having been caught in the coverage "doughnut hole." This represents a fraction of the approximately four million who are expected to qualify for this benefit. Furthermore, a 7 percent increase in coverage for generic drugs in the doughnut hole will gradually increase over the coming decade until the hole is closed completely.
Said HHS Secretary Kathleen Sebelius, "For too long, many seniors and people with disabilities have struggled to choose between paying for needed prescription medication and other necessities like food, rent and utilities. The Affordable Care Act is delivering more affordable prescription drugs to seniors and giving everyone on Medicare better benefits."
For their part, generic drugmakers fear that discounts on brand name drugs in the doughnut hole may actually raise costs by removing the price incentive to switch to generic drugs. They attribute the Congressional Budget Office's estimate that closing the doughnut hole will cost $18 billion over 10 years to the removal of price incentives for generics. The Medicare Payment Advisory Commission agrees that the "greater use of generics in Part D is the key to controlled drug costs."
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