Brand-name drug prices jumped nearly 4% the first three months of the year, raising costs for taxpayers subsidizing the Medicare drug program and for some people participating in the program, AARP said Tuesday.
AARP, an advocacy group for senior citizens, said the quarterly increase was the largest since 2000. Pharmaceutical companies say the increases were in line with overall medical inflation.
In a separate report, Families USA said insurers participating in the Medicare program passed on increases for 19 of the top 20 drugs to program participants.
“Part D plans are doing essentially nothing to contain the fast-rising prices by the drug industry,” said Ron Pollack, executive director of Families USA, a health advocacy group that has been a frequent critic of the program.
Mark McClellan, the Bush administration’s point man for the drug benefit, says most Medicare beneficiaries actually have greater protection from increases in wholesale prices than do other consumers.
For example, McClellan says, many beneficiaries selected plans in which they pay a fixed amount for a drug, say $20 for a brand-name drug, and that price won’t change during the year no matter what wholesale prices do. The poorest of beneficiaries are particularly protected from such increases because their payments are capped at $5 for a brand-name drug.
“They didn’t look at the whole picture,” McClellan said.
He acknowledged, however, that the increases would hit Medicare beneficiaries who have not yet fulfilled their deductible and those paying a percentage of drug costs rather than a set co-pay.
AARP surveyed the wholesale prices of 197 brand-name and 75 generic drugs. While brand-name drugs increased 3.9% the first three months of the year, there was no change in the cost of generic drugs, the group said. The Medicare plans emphasize generic drugs.
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