Herald News

Senate Urged To Alter Part D

Herald News / NorthJersey.com — Wednesday, April 18, 2007


Allowing the federal government to negotiate drug prices directly for its year-old prescription drug program for seniors would save New Jersey taxpayers $782 million a year and lead to lower pill prices, according to a study released Tuesday.

A report by the Institute for America's Future, a coalition of activists and policy analysts based in Washington, D.C., urged the Senate to pass legislation next week – already approved by the House of Representatives – that would allow the government to negotiate bulk prices directly with pharmaceutical companies for its Medicare Part D program.

"What we're looking at is how to save money on the program," said Dean Baker of the Center for Economic and Policy Research, a co-author of the study. "It's part of our campaign to fix the Part D disaster."

The report argued that the nation could save $20 billion a year if Congress undid provisions in the Medicare Modernization Act of 2003, which prohibit such direct price negotiations and instead leave pricing to private companies.

Under Part D, private insurers are subsidized by Medicare to provide prescription drug coverage for more than 40 million Americans – people 65 and older, along with disabled and low-income people on Medicaid.

During the initial months of its rollout last year, participants and pharmacists complained the program was plagued by computer glitches that made filling prescriptions a frustrating and time-consuming process. Others said the many plan options were far too complicated – New Jersey seniors had 57 Part D plans to choose from this year. But many enrollees warmed to Part D after experiencing savings on prescriptions, which was the original intent of lawmakers, who forecast the program will cost taxpayers as much as $700 billion over the next decade.

The bottom line for seniors in passing the legislation before the Senate would be lower drug prices, according to Joe Feldman, a Medicare recipient from Manchester, who spoke during a conference call about Tuesday's report.

Feldman said he and his wife were currently struggling to buy prescriptions under Part D, and that his wife had already hit her maximum benefit, suspending her coverage in a "doughnut hole" gap and forcing her to buy pills out-of-pocket.

"For us it's been a disaster, and for others out there it's probably more of a disaster than what we've gone through," Feldman said. "Fortunately, I did not hit the 'doughnut hole,' but I paid through the nose anyway. It's a terrible bill that discriminates against those with lots of pills to take. It has to be changed for the benefit of seniors."

– Suzanne Travers contributed to this report.

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