New Study Shows Medicare Part D
Lowering Costs and Improving Access

Washington, D.C. (September 18, 2007) — Medicare beneficiaries continue to reap significant reductions in their out-of-pocket costs while gaining improved access to medicines due to the Medicare prescription drug benefit, according to a new study (read the summary) released today by the Pharmaceutical Research and Manufacturers of America (PhRMA).

The study, conducted by The Amundsen Group, Inc. and based on actual prescription data provided by Verispan, looked at seniors who lacked prescription drug insurance in 2005. It evaluated their out-of-pocket spending on medicines and use of medicines in 2005, when they lacked prescription drug insurance, and in 2006 (the benefit’s first year of operation) after they gained insurance through Medicare Part D.

This is one of the first Medicare Part D studies to be based on the actual prescription activity of Medicare beneficiaries. The study found that these seniors reduced their daily, per dose out-of-pocket costs by over two thirds (69 percent) under Part D.

At the same time, access to medicines improved. The number of prescriptions filled each month—both brand and generic—increased from 1.7 in 2005 to 3.3 in 2006. Independent research conducted before the implementation of Part D had shown that seniors without prescription drug insurance were less likely than those with insurance to fill needed prescriptions.

The Amundsen analysis also found that the total monthly out-of-pocket cost of medicine for these seniors declined by an average of 45 percent in 2006. The percentage of those spending under $100 per month out of pocket for medicines increased— from 77 percent of the group in 2005 to 91 percent in 2006. The percentage of those spending under $10 per month increased from 21 percent to 33 percent.

“This study shows that the Medicare prescription drug insurance program is doing what it was designed to do. It’s offering seniors better access to care and to more affordable care. This is a welcome addition to other research that shows that the program offers a broad choice of medicines and low premiums, while coming in below cost.. Better access to medicines is a key to improving healthcare, and it offers the opportunity to avoid hospitalizations, emergency room visits, and nursing homes,” says PhRMA senior vice president of policy Richard Smith.

According to the study, savings and improvements in access were even bigger for low-income seniors receiving an enhanced Part D benefit. These seniors reduced their average monthly out-of-pocket costs by 75 percent—from $41 per month in 2005 to $10 per month in 2006. At the same time, their average number of prescriptions filled increased from 1.2 to 4.1 per month. Patients with disabilities under the age of 65 also experienced higher than average improvements in access and cost savings.

The Amundsen analysis adds to the evidence that shows the Medicare prescription drug program is giving Medicare beneficiaries previously without coverage better access to the care that they need at a lower overall cost.

Read the study

Read the summary
 

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The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $43 billion in 2006 in discovering and developing new medicines. Industry-wide research and investment reached a record $55.2 billion in 2006.

PhRMA Internet Address: www.phrma.org

PhRMA en Español: www.nuestraphrma.org

For information on how innovative medicines save lives, visit: www.innovation.org

For information on the Partnership for Prescription Assistance, visit: www.pparx.org

For information on the danger of imported drugs, visit: www.buysafedrugs.info