Medicolegal Issues

Pharma Pledges Price Cut


The June 22 announcement of an $80 billion deal to help reduce out-of-pocket drug costs for Medicare beneficiaries has elicited mixed reactions on what it might mean for patients, and calls for hospitalists to remain vigilant about prescription drug expenses.

Under a pledge negotiated with the White House and congressional Democrats, the pharmaceutical industry has promised a 50% discount for name-brand drugs to beneficiaries stuck in the notorious gap of the Medicare Part D prescription drug plan, commonly called the “doughnut hole” (see “Beware the Doughnut Hole,” June 2009, p. 1) In 2009, the gap in coverage kicks in after $2,700 in total drug costs and persists until $6,154 in total costs, by which point patients have spent as much as $4,350 of their own money for prescription drugs.

President Obama says the gap “has been placing a crushing burden on many older Americans who live on fixed incomes and can’t afford thousands of dollars in out-of-pocket expenses.” The AARP hails the “unique solution” as a “major step forward,” though other industry observers have taken a more circumspect stance and say they want to see tougher cost-control measures in writing.

“You don’t want to look an $80 billion gift horse in the mouth, but there’s some halitosis in this mouth,” says Bill Vaughan, a health policy analyst for Consumers Union in Washington, D.C. “It’s not as pure and altruistic as it seems at first blush, and people need to keep pushing for generics because these [brand-name drugs] are grossly overpriced.”

Under the proposal, the cost for a 30-day supply of the beta-blocker drug carvedilol (Coreg) could be halved, from $142.79 to $71.40, based on’s current retail prices. Even with the savings, the drug would still cost almost four and a half times more than a generic alternative, metoprolol tartrate (Lopressor), which costs $15.99 for a 30-day supply.

The deal also includes several caveats: The pledge doesn’t address the cost of brand-name drugs before or after the coverage gap, and the doughnut-hole price reduction would go into effect only if Congress enacts healthcare reform legislation.

Battles already are looming over the fight to make generics more accessible and to eliminate the doughnut hole entirely.

“I think the sense is that … everybody is going to have to give back a little bit,” says William D. Atchley Jr., MD, FACP, FHM, chief of the division of hospital medicine for Sentara Medical Group in Norfolk, Va., and a member of SHM’s Public Policy Committee. “This is a different landscape than the early 1990s. … Stakeholders are ready to be proactive and work with people.”

News accounts suggest that the pharmaceutical industry will offer an estimated $30 billion over 10 years toward narrowing the gap, while another $50 billion in concessions still must be worked out. Even so, consumer advocates like Vaughan say the need for hospitalists to help patients avoid unnecessary drug costs remains as high as ever.

Dr. Atchley, a former member of SHM’s board of directors, says hospitalists need to know what’s available in the hospital pharmacy and maintain an open line of communication with their patients in terms of their access and ability to pay for prescriptions.

“You need to understand patients’ economic status. You need to know if they get their medication from Walmart or the [Veterans Affairs] hospital pharmacy,” he says. “Cost is an issue to our Medicare patients, and it’s important to collaborate with them to make sure they can afford the drug. If they can’t, you need to work with them to find another affordable drug that will provide the same benefit.” TH

Bryn Nelson, PhD, is a freelance writer based in Seattle.

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