A Decade of Proving Critics Wrong

As it was enacted into law in 2003, the Medicare prescription drug benefit, which would come to be known as Medicare Part D, had no shortage of critics.  A New York Times story cited fears that the program’s private sector-based structure would leave “the elderly exposed to a future of soaring drug costs.”

Others said that insurers would never agree to create drug-only plans and that the marketplace would be bereft of options for seniors.  And then there were the persistent critics who argued that offering seniors a broad range of competitive plan choices, instead of a one-size-fits-all government-run approach, would only confuse and frustrate them.

Now, ten years after Medicare Part D was fully implemented, those arguments have long been put to rest.  Our Medicare Today coalition conducts an annual nationwide survey of seniors to ascertain how well the prescription drug program is working for them.  The results, as has been the case every year, show that this remains an enormously popular program that is changing lives for the better by making prescription medications affordable and accessible.

Here’s what we learned from this year’s Morning Consult survey of approximately 2,000 seniors:

• 88 percent are satisfied with the Medicare Part D coverage

• 80 percent say their plan is a good value

• 92 percent report their plan is convenient to use

• 84 percent say it is important for them to have a variety of plans from which to choose (the ‘competition will cause confusion’ argument never did hold water and was, quite frankly, demeaning to seniors)

And, as to the concerns expressed over a decade ago regarding ‘soaring’ costs, Medicare Part D’s structure in which plans compete on the basis of value has resulted in average monthly premiums staying relatively stable at just over $30 for several years now.

Unfortunately, years after the original criticisms of Part D have long been vanquished by the program’s indisputable successes, there are still efforts to scramble its existing structure and give the federal government a significantly greater role in pricing and drug accessibility.  We can only hope that policymakers take note of these polling numbers and realize it would make little sense to fundamentally change a program that is not only popular but fulfilling its intended mission.

CATEGORIES: Access, Health, Healthcare Costs and Value, Medicare  |   Link  |   Trackback  |   Comments (220)

An Innovation-Centric Approach to Pricing and Accessibility

“Policy should not lose sight of the fact that new treatments represent miracles to many patients, and should encourage more, not less innovation.”

With those words in her op-ed in the Wall Street Journal, Susan DeVore, president and CEO of Premier, Inc. and chair of the Healthcare Leadership Council, gets right to the heart – or what should be the heart – of the national debate over pharmaceutical pricing.  With so many new lifesaving therapies in various stages of development and clinical testing, how do we make these medicines accessible to patients and consumers while encouraging even more beneficial innovation?

Ms. DeVore answers that question with one word – competition.  As she accurately points out, new breakthrough drugs like the cure for Hepatitis C often enter the marketplace with extremely high prices, but those costs drop considerably when competing products are made available.  Thus, one important answer to the drug pricing issue is to speed the process by which new drugs and medical technologies are approved for the market.  The Healthcare Leadership Council has made several recommendations in this area.

The answer is most certainly not to be found in the form of government price controls.  As Ms. DeVore writes, “The reality is that government negotiation will translate into price controls.  I have limited faith in the government’s ability to set pricing better than the market, or keep pace with innovation.  Their solution will invariably set prices too low, creating a chill on research and discovery as talent and capital leaves the sector to seek a better return elsewhere.”

The Premier CEO is absolutely right.  We can do better than a pharmaceutical pricing debate that, up to now, has been largely binary – either price controls or not.  We need to discuss mechanisms and policies that will bring more innovative products to the market and, in so doing, strengthen accessibility and affordability.

CATEGORIES: Access, Healthcare Costs and Value, Protecting Innovation  |   Link  |   Trackback  |   Comments (79)