Lower Theprices For All Part D Prescriptions
Medicare’s Part D drug program is only 15 years old but in at least one way, it is functionally obsolete. Since Congress passed Part D in December 2003, the pharmaceutical industry has produced an array of drugs that have eclipsed not only medical expectations for progress but the economic assumptions that underlie the Part D program. The program includes a catastrophic protection provision. After a Part D enrollee pays the first $5,100 in annual drug costs, his share drops to 5 percent. Taxpayers pick up 80 percent and the remaining 15 percent is assigned to private insurance. That was adopted before the creation of effective but super-expensive modern drug protocols that often cost $200,000 a year or more. Even at 5 percent, an individual would have to pay $10,000 of a $200,000 bill. There appears to be consensus in Congress to do something about catastrophic coverage, with key committee leaders from both parties advocating caps on out-of-pocket payments. Democratic Sen. Ron Wyden of Oregon, for example, proposes a $2,650 cap, which is similar to caps in many private-sector drug plans. More than 1 million of more than 40 million Part D enrollees pay more out-of-pocket than the proposed cap. The problem is that such a cap would provide an incentive for even higher prices, since more of the cost would be passed to taxpayers. A cap alone will be insufficient. Congress should not just authorize, but mandate that Medicare use its vast market power to negotiate lower prices for all Part D drugs.