CQ HEALTHBEAT NEWS
March 1, 2007 – 4:58 p.m.
Consumers Union Report Finds Some Medicare Rx Drug Prices Increasing

Twenty-eight percent of Medicare prescription drug plans tracked in five zip codes across the country increased their costs for a group of selected drugs by 5 percent or more in 2006, with prices for one Florida plan rising by nearly a third, according to a new report from Consumers Union.

Such increases also might continue in 2007, according to the report, which was released late Wednesday. From January to February — right after beneficiaries locked into a plan for the calendar year — 95 percent of the sample plans increased their costs by some degree for the package of five widely used prescription drugs. Of those, 21 percent increased costs by 5 percent or more in the one-month period, according to Consumers Union.

“The whole point of having Medicare drug insurance is to protect against the unexpected, and we’re finding a lot of unexpected cost increases,” Consumers Union Senior Policy Analyst Bill Vaughan said in a news release. “Each time drug costs go up under these plans, seniors are pushed that much closer to the brink of the doughnut hole coverage gap.”

In a statement, acting Centers for Medicare and Medicaid Services Administrator Leslie V. Norwalk said the report contains “a number of factual errors which we pointed out to Consumers Union officials before the report was released.”

Norwalk added that drug price fluctuation occurs across all private sector markets and affects those with public or private insurance. “The fact is, approximately 90 percent of Part D beneficiaries pay co-pays that do not fluctuate during the year,” she said.

Since December 2005, Consumers Union, the publisher of Consumer Reports, has used the Medicare.gov Web site to track plan costs of five widely used drugs offered by Medicare Part D insurance plans in five zip codes in New York, Florida, Texas, Illinois and California. More than three-fourths of the plans changed their costs for the selected drugs three or more times during 2006, while 30 percent of the plans changed their costs at least six out of the 12 months. For the one-month period of January to February 2007, only three of the surveyed plans listed the same cost.

Vaughan said the cost increases underscore the need for Congress to require drug price negotiation to assure that seniors get the lowest prices for drugs. The administration opposes legislation (HR 4) that would require such negotiation, saying that the private sector can do a better job than the government in negotiating low prices.

Consumers Union Report (pdf)

Source: CQ HealthBeat News
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