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Medicare Monday: Negotiation in Medicare Part D works

Allyson Funk   |     December 12, 2016   |   SHARE THIS

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Earlier this year, we highlighted a new QuintilesIMS Institute research brief that, for the first time, looked at Part D costs after accounting for rebates.

The Medicare Trustees have consistently stated rebates negotiated for brand medicines in Part D are substantial and have increased each year of the program. This new research confirms those rebates are significant: an example of how robust competition and negotiation work in the program.

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Across drug classes widely used in Part D, the report found Medicare Part D plans receive an average 35.3 percent discount from manufacturer list prices. This includes supply chain discounts and negotiations with Part D plans. Across the 12 therapeutic classes of widely used medicines in Part D the report analyzed, net costs to plans for prescription drugs ranged from 31 to 54 percent of list price. Rebates were also substantial in the antidepressants class which is a protected class in Medicare Part D; those rebates averaged around 34 percent.

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Substantial negotiation in Medicare Part D works to keep costs low for beneficiaries and taxpayers. Meddling in that negotiation could have a harmful impact on seniors and people living with disabilities and their access to affordable prescription drug coverage.

Allyson Funk

Allyson Funk Ally is a senior director of public affairs at PhRMA focusing on Medicare, Medicaid, the Affordable Care Act, and other public programs. Her previous experience includes leading health communications for a large membership organization, supporting public affairs clients, and working for the governor of Louisiana. Ally enjoys travel, trying new restaurants and spending time with Buddy, her 9-year-old rescue Pomeranian. In the fall, she and her husband are almost always wearing Saints gear.

Topics: Part D, Medicare, Medicare Monday

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