Open letter against forcing Medicare rebates being provided to beneficiaries

Almost 400 organizations, including a coalition with members from the pharmaceutical industry and insurers, have written an open letter to the US House of Representatives warning them against forcing drug makers to provide Medicare rebates to beneficiaries from lower income groups.

The coalition, which is led by the Council for Affordable Health Coverage, arrived before the Obama administration released its annual budget in the hopes that the White House will be seeking to propose mandated Medicare Part D rebates again. In the budget proposal for the fiscal year 2015, the administration forecast that such rebates could allow the saving of $117 billion over a period of 10 years.

This notion was broached last week when the AARP also flagged its support for the rebates during the testimony which took place before a congressional committee and made a point and stated that it backed the Medicare Drug Savings Act. The bill was put forward earlier in the month by Amy Klobuchar, US Senator and required the federal government to negotiate on discounts and to seek out rebates for Part D of Medicare.

In the letter, the organizations maintained that Part D of Medicare is working and pointed out data which indicated the costs and premiums of beneficiaries are lower than what the forecast was. However, they also stated that with a mandatory rebate for Part D Medicare, beneficiary premiums could be increase which would jeopardize access and adherence of patients to medicines which are needed while at the same time increasing Medicare spending on other medical services which are more costly.

The organizations also issued a similar letter 2 years ago and they claim that studies have estimated that Part D premiums for most of the beneficiaries of Medicare are likely to rise anywhere between 20-40% and such an increase can’t be afforded by a number of people. They also argue that some of the costs would shift to other individuals including employers and would also weaken the incentive of the pharmaceutical industry to develop medicines further.

Part of the members of the Council on Affordable Health Coverage is the company, Pharmaceutical Research and Manufacturers of America. This is an industry trade group as well as being a trade group for pharmacy benefit managers along with some larger insurers. Groups which signed the letter also include those organizations which represent businesses, patient groups, seniors and others as well.

It is uncertain to the extent to which the campaign will be successful however efforts made in the past to mandate the Part D rebates have not managed to gain the desired amount of traction. Given the recent price hikes which have occurred and the ongoing controversy, chances are that sentiments might change. Recent analysis conducted showed that prices for brand named drugs increased by 14.8% in the previous year while 4.9% increases were for generic medicines. Such increases are representative of averages for a number of prescription drugs but there is an upward trend which is occurring which has brought forth scrutiny among the private and public players as well as Congress members.

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