The NY Times reports that while some companies have raised the prices on their medications double the inflation rate, 3-7 million seniors are expected to hit the “donut hole,” a gap in drug coverage where they will have to spend about $3,000 out of their own pockets to climb out of. According to The Times:
But Wall Street analysts say they have little doubt that the benefit program, called Part D, has helped several big drug makers report record profits and exceed earnings forecasts made earlier in the year.
Companies have raised prices on many top-selling medicines by 6 percent or more this year, double the overall inflation rate. In some cases, drug makers have received price increases of as much as 20 percent for medicines that the government was already buying for people covered under the Medicaid program for the indigent. Medicare also pays more than the Veterans Administration, which runs its own benefit program.
“Part D was a good thing for almost everybody,” said Les Funtleyder, an industry analyst at Miller Tabak, a research firm in New York.
Drug makers have tried to play down their gains from the program because they do not want to be seen as profiteering in an election year, Mr. Funtleyder said. “You don’t want to draw too much attention to how good it’s been.”
Republicans say that the benefit program is working, and costs less than was expected. The Democrats have said that if they take control of Congress, they will introduce legislation that will allow Medicare to negotiate with drug companies for lower drug prices.
Right now, Medicare is specifically prohibited from doing this. Currently, the Veteran’s Administration does it for veterans.
The Minority Staff of the Committee on Government reform recently estimated that Americans could save $61 billion over the next decade if Medicare negotiated lower prices from the industry.
Regardless of what happens with the election tomorrow, issues with Medicare Part D are not going to go away any time soon.