Rick Smith Testified Before Congress Today About Why Part D Works

Rick Smith Testified Before Congress Today About Why Part D Works

05.22.13 | By

PhRMA’s Rick Smith, Executive Vice President of Policy and Research, testified today in a hearing called, “10 Years Later: A Look at the Medicare Prescription Drug Program,” hosted by the Senate’s Special Committee on Aging.

In talking about Part D’s success, such as costing 45 percent less than CBO initially projected and a 94 satisfaction rate with beneficiaries, Rick conveyed medicine’s crucial role in fighting disease and keeping people healthy. This in turn helps reduce other health care costs.

Research has also shown that Part D has helped reduce other health costs in Medicare. In 2011, a Harvard study found that the implementation of Part D was associated with a $1,200 average reduction in nondrug spending for Medicare beneficiaries with limited prior drug coverage in each of the first two years of the program.  In fact, last November CBO announced that they would credit policies that increase the use of medicines with savings on other Medicare services.

Much of the program’s high performance is also 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.

Rick also delved into the prescription drug lifecycle. As we’ve talked about before on the Catalyst, the prescription drug lifecycle allows for brand companies to develop medicines that later are copied and widely used as generic medicines.  Four out of five prescription medicines are now filled with a generic. This lifecycle system helps contain costs and reallocates resources from older to newer medicines that are the source of medical advances. New research suggests that better use of medicines can result in even larger savings for patients with chronic disease - for instance, over the next decade improved adherence to medicines for congestive heart failure alone could yield $22 billion in Medicare savings.

If you have a chance it’s definitely worth checking out Rick’s full testimony. It’s filled with much more detail about Part D and potential threats to the program.

Comments

Hide Comments

More On PhRMA — powered by PhRMApedia