WASHINGTON, D.C. (May 22, 2013) – Richard Smith, Executive Vice President of Policy and Research at Pharmaceutical Research and Manufacturers of America (PhRMA), testified today in a hearing called “10 Years Later: A Look at the Medicare Prescription Drug Program,” hosted by the U.S. Senate’s Special Committee on Aging.
“Since the program’s inception, Medicare Part D has succeeded for seniors and disabled beneficiaries and for taxpayers, significantly improving access to medicines while helping control other health costs,” said Smith. “Much of the program’s high performance is because of its competitive structure, which allows for savings negotiated by large powerful private plans—the same plans used by private employers and insurers—on behalf of seniors and taxpayers.”
Average monthly premiums have remained virtually unchanged at around $30 for the last three years - less than half of what was initially forecast. Ninety-four percent of seniors report that they’re satisfied with their Part D coverage, according to MedPAC.
Part D is the rare success story of a program coming in 45 percent less than initially anticipated. In each of the last three years, the Congressional Budget Office (CBO) has reduced its 10-year cost projections for the program by over $100 billion.
In addition to costing less than expected, Part D is helping reduce other health costs in Medicare. In November, CBO announced it would credit policies that increase the use of medicines with savings on other Medicare services. This major development cited mounting research showing the role of medicines in fighting disease and keeping people healthy and, in turn, controlling other health care costs. For example, CBO cited Harvard research that found in 2011 that the implementation of Part D was associated with a $1,200 average reduction in nondrug medical spending for Medicare beneficiaries with limited prior drug coverage. This translates to about $13 billion in 2007.
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research and biotechnology companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. Since 2000, PhRMA member companies have invested approximately $550 billion in the search for new treatments and cures, including an estimated $48.5 billion in 2012 alone.
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For information on how innovative medicines save lives, visit: http://www.innovation.org
For information on the Partnership for Prescription Assistance, visit: http://www.pparx.org
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