When CBO speaks, Washington Listens

When CBO speaks, Washington Listens

02.15.13 | By Jenni Brewer

Yesterday on The Hill's Congress Blog, our President and CEO John J. Castellani discussed the Congressional Budget Office's new methodology for calculating the cost of Medicare policies to reflect the effect of prescription medicines on total medical costs. This is the first time prescription medicines have been distinguished with a broad certification of achieving savings on other Medicare costs, so for every 1 percent increase in the total number of prescriptions filled, there is a .02 percent decrease in spending on medical services, such as hospitalizations.

Using diabetes and other diseases as examples, Castellani highlighted how medicines can help cut down on more costly health care expenses, saving patients and the government money while improving quality of life. Discussing the costs associated with diabetes, which affects nearly 26 million Americans, Castellani illustrated how access to medicines can help control patients' physical and financial burdens:

"If uncontrolled, diabetes can lead to many complications, including amputations, kidney failure, heart attack and stroke. Each of these complications comes with a cost. The average cost of amputation surgery is nearly $40,000. A single year of dialysis for kidney failure patients costs $83,000. However, a year's supply of medicines that help control a patient's diabetes typically averages $2,400."

The CBO's updated methodology illustrates how prescription medicines are the innovation that can offset other health care costs. Urging policymakers to recognize the value of medicines and how they can curb other medical spending, Castellani emphasizes that not recognizing their value could result in increased costs that affect taxpayers today and in future generations.

Medicare Part D is one of the few government programs saving money. In its seventh year, the program is coming in 43 percent below the cost originally expected. Additionally, the satisfaction rate among beneficiaries is a remarkable 90 percent. Visit our website here to learn more about why Part D works.

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