Medicare Monday: Negotiation in Medicare Part D works

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.

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.

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.