Drug Companies Pledge $80 BILLION FOR OLDER ADULTS IN Health Care Reform

The White House announced an agreement with brand-name drug manufacturers to provide discounts of up to 50 percent for older adults and people with disabilities when they reach the coverage gap, or “doughnut hole,” in the Medicare Part D prescription drug benefit. The discount agreement would take effect only if it is part of successful health reform legislation.

Drug companies said they would give most people with Medicare a discount of up to 50 percent on brand-name and biologic medicines, but not generic drugs, that they purchase when they are in the coverage gap. Currently, Medicare Part D plans cover 75 percent of drug costs until the total amount (what the enrollee pays plus what the plan pays) reaches $2,700, and then individuals with Medicare must pay the full price for their drugs until their out-of-pocket spending exceeds $4,350.

The commitment came in a deal with the White House and Senator Max Baucus, Democrat of Montana and chairman of the Senate Finance Committee. However, the White House estimated that out of the $80 billion, $30 billion would be used to assist people with Medicare when they are in the doughnut hole, according to the New York Times. The other $50 billion reflects savings to the government that could be used as part of the health care reform package, but these savings have not yet been identified.

According to reports by the White House, people with Medicare Part D will not need to complete complicated paperwork to obtain the drug discounts directly from their pharmacies. Although individuals with Part D will pay half the cost of their drugs while they are in the coverage gap, the full cost of medicines will count toward their out-of-pocket limit. Courtesy of Medicarerights