Press Release

PhRMA Statement on MedPAC Recommendations

PhRMA April 26, 2013

Washington, D.C. (October 6, 2011) — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Matt Bennett issued the following statement on the Medicare Payment Advisory Commission’s (MedPAC) recommendations:


“PhRMA believes it is important for physicians to be paid fairly. However, today’s MedPAC recommendations are not the appropriate way to accomplish that goal.


“MedPAC’s job is to bring expertise to bear on issues. In this instance, however, in addition to its recommendations, MedPAC offered a list of options that would result in significant policy changes, without any meaningful public discussion, data analysis, or rationale. By the Commission’s own words, it assembled a list of items, such as government imposed price controls in Part D, that is not based on its previous work. Showing that the Commission had not fully considered the implications of these items for patients and the health care system, today’s vote reflected an unusual level of dissent among the Commissioners. Simply put, MedPAC has failed to engage in the open, deliberative process that all stakeholders expect of it. 


“Part D, unlike the physician payment formula, is working. Yet MedPAC proposes to correct the physician payment formula by imposing on Part D the same type of failed policies that have been applied to physician payment. Correcting the failed Medicare physician payment formula should not be done by adopting policies that would undermine the highly successful Medicare Part D program. 


“A new study by researchers at Harvard Medical School, published today on the Web site of the American Journal of Managed Care, shows that the implementation of Part D resulted in nearly 11 million seniors gaining comprehensive prescription drug coverage. The researchers note that this finding, coupled with other recent research showing savings in hospital and nursing home costs of about $1,200 per newly insured Part D beneficiary, implies overall savings to Medicare of $13.4 billion in 2007, the first full year of the Part D program. This represents more than one quarter of Part D’s total cost during that time.


“This latest round of research further bolsters the overwhelming body of evidence chronicling Part D’s success. Since its inception, the program has provided effective, affordable access to medicines. The program’s cost is 41% below projections—even before counting the savings it has produced on hospital and nursing home care. Recently, the Department of Health and Human Services announced that average monthly Part D premiums for 2012 will fall slightly to $30 – a 46 percent decrease from original premium projections and slightly below last year’s premium.”

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