Press Release
FOR IMMEDIATE RELEASE
January 19, 2007
Contact:
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Deane Beebe Communications Director Medicare Rights Center 212-204-6219 |
Sidney Wolfe Director, Public Citizen Health Research Group 202-588-7703 202-588-7741 |
Sharon Treat Executive Director NLARx 207-622-5597 207-242-8558 |
Consumer Groups Counter PhRMA Myth that “All is well with Medicare Part D”
To dispel the PhRMA myth that Part D is working well and is not in need of repair, the recently launched “Truth is the Best Medicine” campaign released the second fact sheet in its upcoming series.
The new fact sheet (below) debunks myths on issues such as what people with Medicare really want and whether the benefit delivered through private insurance plans is actually lowering drug costs.
Last week, the U.S. House of Representatives passed a measure requiring the Secretary of Health and Human Services to negotiate with drug manufacturers for lower drug prices for people with Medicare. President Bush has stated he would veto such a bill. The U.S. Senate is now weighing alternative forms of the legislation.
“Let’s be straight with the American people,” said Sharon Treat, executive director of the National Legislative Association on Prescription Drug Prices. “Part D is too complicated and too expensive. The supposed cost savings in the first year of operation really reflect mistakes in the initial cost estimates and creative pricing schemes designed to encourage seniors to sign up for Part D plans. Now that seniors have done so, many policies are jacking up premium costs well above the rate of inflation, and have reduced coverage and stopped offering plans for the so called ‘doughnut hole.’ It’s time for Congress to fix Part D: we need a simplified program, fair prices, and an end to ‘bait and switch’ tactics.”
“Drug coverage that vanishes when you need it most is a hoax,” said Robert M. Hayes, president of the Medicare Rights Center, a national consumer service organization. “Anyone who says this benefit is working for all has not heard the cries on our consumer hotlines from Americans who have fallen into the coverage gap and cannot afford their medications.”
The Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s lobbying group, spent over $1 million on newspaper and television ads to fight the push toward price negotiations, which enjoys overwhelming pubic support. PhRMA’s message is simple but false: Part D is working well and there is no need to change it.
“The more information that comes out, the clearer it is that without negotiated prices, Medicare Part D is a boondoggle for the drug companies but a simultaneous hardship for millions of older Americans,” said Sidney M. Wolfe, M.D., director of Public Citizen's Health Research Group.
To counter PhRMA’s propaganda, the Medicare Rights Center, Public Citizen, and the National Legislative Association on Prescription Drug Prices have formed a joint campaign, “Truth is the Best Medicine.” By disseminating the truth about Part D and prescription drug prices, the campaign seeks to beat back PhRMA’s public relations blitz and support steps that will bring lower prescription drug prices for people with Medicare.
In the coming days and weeks, the three groups will continue to provide information and resources to reporters to counter drug industry myths and propaganda. The groups’ first fact sheet provided a fact check on PhRMA’s claim that price negotiations would severely limit research and development of new medicines and is available at “http://www.medicarerights.org/R&D_factsheet.pdf”. The groups also released a report last week describing how taxpayers and people with Medicare are being gouged by the drug company Abbott Laboratories on its AIDS/HIV drug Norvir. The report is available at “http://www.medicarerights.org/Norvir_report.pdf”
The National Legislative Association on Prescription Drug Prices (NLARx) is a nonpartisan, nonprofit organization of state legislators from across the country who advocate for lowering prescription drug costs and increasing access to affordable medicines. Legislators from the District of Columbia and all of the New England states plus Pennsylvania, New York, West Virginia, Oklahoma, Texas, Alaska, Arizona, and Hawaii are members of NLARx.
The Medicare Rights Center (MRC) is the largest independent source of health care information and assistance in the United States for people with Medicare. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.
Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.
Truth is the Best Medicine.
Get the facts on prescription drug costs.
Myth #2: Part D is working well and there is no need to change it
Fact: The majority of people with Medicare believe Part D should be improved.
Part D boosters love to cite the 80 percent satisfaction rate found by recent polls about the benefit, but they ignore other key findings. Seventy-three percent of older adults say that the current benefit is “too complicated” and 81 percent favor lifting the prohibition on Medicare drug price negotiations. Two-thirds of older adults support providing a drug benefit directly through Medicare.[1]
Fact: Part D plans have failed to lower drug costs.
Proponents point to average savings of $1,200 on drug costs under Part D as proof that plans have been able to keep prices low.[2] But the savings are almost entirely due to government subsidy: taxpayers fund 75 percent of the cost of Part D coverage. Prices for medications have actually increased under Part D[3] and only a little over half of the older adults enrolled in Part D plans say they are saving money with the benefit. Thirty-one percent are “paying about the same amount” as before, and 14 percent are actually paying more under Part D.[4]
Fact: The lower Part D costs touted by the Bush administration are simply revised projections.
Just because the initial cost projections were incorrect doesn’t mean that Part D isn’t overpriced. The actual costs of the program didn’t match up with the projections because of lower than expected enrollment, slower increases in drug prices immediately before the program started, and premiums that were artificially low in order to attract enrollment—not because of successful market competition as the Centers for Medicare and Medicaid Services (CMS) claim.[5] In fact, $20 billion of the savings are due to lower than expected enrollment in Part D, while another $13 billion is due to slower increases in drug prices before the start of the Part D benefit.[6] And a full accounting of Part D costs for 2006 has not yet been done. For the people with Medicare enrolled in the program, premium costs are up, not down. In fact, average plan premiums for 2007 are up 13.2 percent from 2006, over three times the rate of inflation.[7]
Fact: Fewer Part D plans are offering comprehensive “doughnut hole” coverage.
Options for coverage in the “doughnut hole,” the gap in coverage when individuals must pay the full cost of their medicines while continuing to pay premiums, are more limited in 2007. Although the administration touts an increase in plans that cover generic drugs in the doughnut hole, these offer little help to people who take the highly priced brand name drugs that put them in the doughnut hole in the first place. Humana Complete PDP received the highest enrollment in 2006 among plans offering gap coverage by covering both brand-name and generic drugs. Starting in 2007, however, it will switch to covering only generics in the doughnut hole.[8] In 11 states, people with Medicare have no access to stand-alone drug plans with gap coverage for brand-name medicines.[9]
[1]“Seniors and the Medicare Prescription Drug Benefit,” Kaiser Family Foundation/Harvard School of Public Health, December 2006. (http://www.kff.org/kaiserpolls/upload/7604.pdf)
[]“Medicare Part D and Prescription Drug Prices,” American Enterprise Institute, January 5, 2007. (http://www.aei.org/publications/pubID.25420,filter.all/pub_detail.asp)
[3]“Big Dollars, Little Sense: Rising Medicare Prescription Drug Prices,” Families USA, June 2006. (http://www.familiesusa.org/assets/pdfs/Big-Dollars-Little-Sense.pdf)
[4]“Seniors and the Medicare Prescription Drug Benefit,” Kaiser Family Foundation/Harvard School of Public Health, December 2006. (http://www.kff.org/kaiserpolls/upload/7604.pdf)
[5]“Projected Medicare Part D Costs Drop By 30 Percent,” CMS press release, January 8, 2007. (http://www.hhs.gov/news/press/2007pres/20070108.html)
[6]“Projected Medicare Part D Costs Drop By 30 Percent,” CMS press release, January 8, 2007. (http://www.hhs.gov/news/press/2007pres/20070108.html)
[7] Letter to Health and Human Services Secretary Michael Leavitt, U.S. House of Representatives Committee on Government Reform, October 12, 2006. (http://oversight.house.gov/Documents/20061012124517-46697.pdf)
[8]“Status Report on Medicare Part D Enrollment In 2006: Analysis Of Plan-Specific Market Share and Coverage,” Health Affairs, November 21, 2006. (http://content.healthaffairs.org/cgi/content/full/26/1/w1)
[9]Medicare Prescription Drug Benefit Fact Sheet, Kaiser Family Foundation, November 2006. (http://www.kff.org/medicare/upload/7044-05.pdf)