New study shows US Medicare Part D Rx drug costs see significant decline

The average costs for medicines frequently used by the USA’s Medicare Part D beneficiaries have declined significantly since the implementation of the program, according to a new report released last Friday by the IMS Institute for Healthcare Informatics, titled Medicare Part D at Age Five: What Has Happened to Seniors’ Prescription Drug Prices? and funded by the trade group Pharmaceutical Research and Manufacturers of America (PhRMA).

Specifically, average costs for medicines in the top 10 therapeutic classes in Medicare Part D declined by more than a third between January 2006 and December 2010, from $1.50 to $1.00. Furthermore, the IMS Institute projects that costs will continue to decline, reaching $0.65 by the end of 2015. That would be a 57% decrease from 2006.

According to PhRMA vice president Karl Uhlendorf, the report “gives further evidence that Part D is a successful program that provides unprecedented access to life-saving medicines for seniors and should not be weakened by unsound policies. The analysis highlights the nature of the biopharmaceutical market, in which savings are possible because innovator biopharmaceutical companies produce medical advances through pioneering scientific work and large-scale investments which lead, over time, to generic copies that consumers use at low cost for many years. The competitive, market-based structure of Part D is allowing for an accelerated adoption of generic drugs by seniors as prescription drug plans compete to maximize these savings from the prescription medicine lifecycle. This leads to lower costs for the program and for beneficiaries.”