PhRMA put a thumb in the Medicare Part D “doughnut hole” yesterday. The trade group representing the pharmaceutical industry announced that it would contribute $80 billion dollars over the next 10 years to help cover seniors’ brand-name prescription drug costs, and as a contribution to pay for health care reform.
The Wall Street Journal and the New York Times both report that $30 billion could go to reducing the prices seniors pay for brand name drugs under the Medicare Plan D doughnut hole—the period of coverage during which consumers must pay 100 percent of their prescription drug costs. The other $50 billion could be used to pay for health reform.
AARP supports the plan as a means to help seniors cut their drug costs. The blog, FiercePharma calls it a bigger win for drug companies. And indeed, the Wall Street Journal Health Blog reports that the deal positions PhRMA to benefit by keeping seniors from switching to generics after the doughnut hole kicks in.
But is that really a good deal for consumers?
It’s may be good news for those who are on a drug for which there are no generic alternatives—and staying on a necessary brand name is better than skipping prescription medications altogether. But even at half price, many of the most popular brand name drugs are still far more expensive than generics, which have repeatedly proven to be just as safe and effective. See this chart for more examples.
Our latest Best Buy Drugs report on drugs to treat enlarged prostate symptoms, for example, showed that switching to our Best Buy selection, doxazosin, a generic alpha-blocker that is as effective and safe as newer drugs, could save you nearly $3,000 a year over the heavily advertised, brand-name drug, Flomax—even with a 50 percent PhRMA discount, that’s still savings of over $1,500 a year.
Our own policy analyst, Steven Findlay, told the Times, “It’s great that PhRMA has stepped up to the plate with a proposal to help lower seniors’ drug costs. But this still leaves the doughnut hole in place and hundreds of thousands, perhaps millions, of seniors on the hook for drug costs they cannot afford. We hope Congress will eventually do away with the doughnut hole.”
—Kevin McCarthy, associate editor
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