PhRMA Opposes Changes to Medicare Part D

Medicare Part D should not be “weakened by unsound policy proposals,” said Karl Uhlendorf, vice-president of the Pharmaceutical Research and Manufacturers of America (PhRMA), in a statement earlier this month. The program expands access to medications and yields great value for beneficiaries, he said.

The PhRMA statement follows the introduction of two bills that would require drug manufacturers to provide Part D rebates for dual-eligible and low-income Part D enrollees. Representative Henry Waxman (D-CA) and Senator John D. Rockefeller IV (D-WV) introduced these bills after the US House of Representatives Committee on Oversight and Government Reform found that drug costs in the Medicare Part D program were substantially higher than costs for the same drugs under Medicaid.

PhRMA argues that Medicare Part D already provides significant savings. The US Department of Health and Human Services predicted that average monthly Part D premiums for 2012 would fall to $30, which would be a 44% decrease from original premium projections, according to the PhRMA statement. In addition, the Congressional Budget Office (CBO) estimated that spending on Medicare Part D was 41% lower than its initial 10-year estimate, said PhRMA in the statement.

However, CBO estimated that under current law, the cost of Medicare’s outpatient drug benefit would increase by roughly 10% each year. The cost will rise from $68 billion this year to $175 billion in 2021, according to The New York Times. CBO also predicted that the rebate policies in the Waxman bill would reduce the federal deficit by $112 billion over the next 10 years.

Government-mandated rebates in Medicare Part D could reduce the pharmaceutical industry’s revenue by $20 billion and potentially lead to the loss of 260,000 jobs, PhRMA said in July. The loss in revenue and jobs “would invariably have a chilling effect on investment in R&D,” said the statement.

In 2010, PhRMA spent $21,740,000 on lobbying, according to the Center for Responsive Politics. Since 1998, the drug industry has spent more on lobbying than any other industry.

See related articles:

J. Wechsler, “Pharma Faces New Political Landscape” Pharm. Technol.34 (12), 26–30 (2010).

“Drugmakers, Uncle Sam Wants You to Help Reduce Spending” (PharmTech Talk blog post)