50% discounts on prescription drugs costs agreed by drugmakers and introduced at the start of the year have saved seniors enrolled in Medicare $38 million in just two months, the US government has announced.
The discounts are among three primary measures included in President Barack Obama's Affordable Care Act aimed at closing the prescription drug coverage gap - also known as the "doughnut hole" - in Medicare, the federal health programme for seniors and some disabled people, by 2020. From January 1 to February 28, the price reductions enabled each individual enrolled in Medicare's prescription drug plan (known as Part D) to make savings averaging nearly $800 on their out-of-pocket medication costs, while for nearly 11,000 enrollees with very high prescription drug costs who had already hit the doughnut hole, individual savings had averaged $1,775, reports the Department of Health and Human Services (HHS).
As at February 28, 47,718 people had received the average $800 savings, and "millions more beneficiaries are expected to benefit from the programme over the course of the year," it adds.
The second measure involves paying people whose drug expenses put them in the doughnut hole last year a one-time rebate cheque for $250. So far, 3.8 million people have received their rebate payments out of around four million who are estimated to quality. The government says it also expects a similar number of Medicare beneficiaries to enter the coverage gap this year.
Third, the health legislation will gradually expand coverage for generic drugs over the next 10 years and, for 2011, coverage for generic drugs in the doughnut hole has been increased by 7%.
"For too long, many seniors and people with disabilities have struggled to choose between paying for needed prescription medication and other necessities like food, rent and utilities," said HHS Secretry Kathleen Sebelius. "The Affordable Care Act is delivering more affordable prescription drugs to seniors and giving everyone on Medicare better benefits," she added.
However, generic drugmakers warn that provisions for discounts on brand-name drugs provided in the doughnut hole "could have the unintended consequence of creating an incentive for patients to stay on the high-priced brand drug when safe, low-cost generics are readily available."
The Congressional Budget Office (CBO) has estimated that closing the doughnut hole would cost $18 billion over 10 years "primarily because of the incentives created for the use of more brand-name drugs," says the Generic Pharmaceutical Association (GPhA), which represents the sector.
In a report to Congress earlier this month, the Medicare Payment Advisory Commission (MedPAC) "affirms that greater use of generics in Part D is the key to controlled drug costs," says GPhA.