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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 former senior director of public affairs at PhRMA focused on advocacy issues for the biopharmaceutical industry. Her expertise includes Medicare, Medicaid, 340B, health reform and more. Prior to PhRMA, her experience includes leading health communications for a large membership organization, supporting public affairs clients and working for the governor of Louisiana.

Topics: Part D, Medicare, Medicare Monday

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