Press Release

New Study Highlights Continued Success of Medicare Part D

PhRMA April 26, 2013

Washington, D.C. (July 27, 2011) — An important new study published today in the Journal of the American Medical Association found that the Part D prescription drug program saves Medicare about $1,200 per year in hospital, nursing home and other costs for each senior who previously lacked comprehensive prescription drug coverage.  According to other experts, this finding equals about $12 billion per year in savings across Medicare.  Improved access to medicines via the Part D program allows seniors to avoid hospitalizations and the researchers point to numerous studies showing that improved access to medicines helps control costly chronic diseases such as diabetes and hypertension.


“Part D is an unparalleled success and a true model for effective health care,” said John J. Castellani, President and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA). “This is a program that improves the health of Americans and lowers costs for both patients and the federal government.”


Today, over 29 million Medicare enrollees have joined Part D and more than 90 percent of seniors have comprehensive drug coverage. Importantly, both seniors and taxpayers are paying less than anticipated for the program. Recent Congressional Budget Office (CBO) estimates show that Part D spending is 41 percent lower than the initial CBO estimate.  Importantly, this does not even take into account the $12 billion per year of overall Medicare savings attributable to Part D. 


Despite Part D’s improvement in health outcomes and decrease in costs, the President and some in Congress have proposed including government-mandated price controls in Medicare Part D as part of a debt ceiling agreement. Such a provision could have a dramatic negative effect on the economy and patients, and could undermine the success of the program.


“PhRMA opposes implementing government price controls in Part D.  The JAMA study shows the program is helping achieve better health outcomes and saving money, and we believe these achievements are too important to jeopardize with short-sighted policies,” said Castellani. “Not only could such a policy change negatively affect patients, it could also be a devastating blow to our economy and further worsen the jobs crisis.”


recent paper from the Battelle Technology Partnership Practice estimated that a $20 billion per year reduction in biopharmaceutical sector revenue would result in 260,000 job losses across the U.S. economy.  While the research is not specific to any one policy or event, proposals such as government-mandated Part D rebates would be expected to have revenue impact of this magnitude.


The JAMA study can found online at: 




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