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Saturday, April 19, 2008

Medicare Plans Affected by Rising Drug Costs

Medicare Plans Affected by Rising Drug Costs


Published: April 19, 2008

Employers and patients in corporate health plans are not the only ones affected by the soaring prices of specialty drugs. Enrollees in Medicare drug plans are also feeling the pressure.

Many leading pharmacy benefit managers and drug insurers that oversee employer plans also offer coverage through the Medicare Part D drug insurance program, and so are profiting from federal spending on specialty drugs and from Medicare patients’ own high out-of-pocket co-payments.

Driven in part by specialty drugs, the prices of medicines heavily used by the elderly have risen more than 24 percent since June 2006, two senior health economists at Harvard reported in January in the policy journal Health Affairs.

In that article the economists, Richard G. Frank and Joseph E. Newhouse, said single-source unique drugs have the potential to present “important new pressures on the federal budget.”

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