Rising Drug Costs, Medicare Part D, and Defining Value
By Laura Joszt
October 20, 2015
A decade after the introduction of the Medicare Part D program and the program has seen great success—but that may be coming to an end. Panelists debated just that and discussed rising drug costs during the general session “Future Environment for Prescription Drugs and the Impact on Part D” at America’s Health Insurance Plans’ National Conference on Medicare in Washington, DC.
Although she acknowledged that the Part D program has flaws, Lori M. Reilly, Esq, executive vice president for Policy and Research at PhRMA, as a big proponent of the program and highlighted that Part D is almost 50% under budget with premiums almost 40% less than they were projected to be when the program first began, plus it has high beneficiary satisfaction.
However, John Rother, president and CEO of the National Coalition on Health Care, is more bearish on the future of the program. The price of drugs coming out are bigger and bigger, which will impact Part D.
“Premiums going up 13% in 1 year indicates our success with the program—and it’s a successful program—has turned a corner,” he said.
Reilly and Ron Cohen, MD, chair of Biotechnology Industry Organizations and president and CEO of Acorda Therapeutics, are not as concerned. Yes, they agreed, the patent cliff is behind us, but there will be more patents expiring.
Dr Cohen pointed out that healthcare costs ebb and flow—some years there are more patent expirations and some years there are less. He also noted that with the first biosimilar now approved in the United States and more in the pipeline, their impact will be significant in the future.
“It’s a mistake to look at a 2-year period or 1-year period and say ‘the sky is falling,’” Dr Cohen said. “You have to look at the arc and realize that the drugs coming out today will also expire one day.”
The current pipeline of drugs in the US is unprecedented, said Steve Miller, MD, senior vice president and chief medical officer for Express Scripts. Like Rother, he expressed worries over the current 13% increase in drug prices and the fact that prices are expected to continue to go up.