Big Dollars, Little Sense: Rising Medicare Prescription Drug Prices

Note from John Curry: I really don't wonder why -- the "why" is so the pharmaceutical manufacturers get "blessed" with exorbitant profits in return for their extremely generous campaign contributions to the the majority in Congress who passed Medicare Part D. Thank God the Vets are getting a break because the rest of the American public isn't! Please see the comparisons in blue text below:

Key Findings

From November 2005 to April 2006, virtually all Part D plans raised their prices for most of the top 20 drugs prescribed to seniors. For Zocor (40 mg), all Part D plans raised their prices. Almost all (98.5 percent) Part D plans also raised their prices for the lower-strength version of Zocor (20 mg). For Fosamax (70 mg), almost 99 percent of Part D plans raised their prices. For Lipitor (10 mg), over 97 percent of Part D plans raised their prices. A smaller—but still sizable—share of Part D plans (88.9 percent) raised their prices for the higher-strength version of Lipitor (20 mg). For Actonel (35 mg), Toprol XL (50 mg and 100 mg), and Xalatan (0.005%), more than 96 percent of Part D plans raised their prices. For Celebrex (200 mg), Nexium (40 mg), and Norvasc (5 mg), more than 94 percent of Part D plans raised their prices. Only the prices for two generic drugs, furosemide (40 mg) and metoprolol tartrate (50 mg), and the brand-name drug Zoloft (50 mg) were not raised by a majority of Part D plans. However, even for furosemide and Zoloft, a plurality of Part D plans raised their prices. Taking furosemide as an example, 42.5 percent of plans raised their prices, 31.5 percent of plans lowered their prices, and 26.0 percent left prices unchanged.

From November 2005 to April 2006, the median price increases among Part D plans for half of the top 20 drugs prescribed to seniors were at least 4 percent.

• The median price increases for Aricept (10 mg), Celebrex (200 mg), and Lipitor (10 mg) were at least 6 percent.
• The median price increase for both dosages of Zocor (20 mg and 40 mg) was 5.7 percent.
• The median drug prices did not rise for only five of the top 20 drugs: furosemide (40 mg), metroprolol tartrate (50 mg), Prevacid (30 mg), Protonix (40 mg), and Zoloft (50 mg).

From November 2005 to April 2006, for 19 of the top 20 drugs prescribed to seniors, the median Part D plan price changes were virtually identical to changes in manufacturer prices as measured by Average Wholesale Price—AWP.

• The median AWP for the top 20 drugs prescribed to seniors rose by 3.8 percent, while the median Part D plan price change for those drugs was 3.7 percent. This means that Part D plans are not effectively reducing drug price inflation (as measured by AWP) for the seniors they are serving.

As of April 2006, there were large differences in the prices charged by Part D plans compared to the prices secured by the VA.

• For each of the top 20 drugs prescribed to seniors, the lowest price charged by any Part D plan was higher than the lowest price secured by the VA.
• Among those top 20 drugs, the median difference between the lowest Part D plan price and the lowest VA price was 46 percent. In other words, for half of the 20 drugs, the lowest price charged by any Part D plan was at least 46 percent higher than the lowest price secured by the VA.
• For Zocor (20 mg), the lowest VA price for a year’s treatment was $127.44, while the lowest Part D plan price was $1,275.36, a difference of $1,147.92 or 901 percent. For Zocor (40 mg), the lowest VA price for a year’s treatment was $190.76, while the lowest Part D plan price was $1,275.36, a difference of $1,084.60 or 569 percent.
• For Protonix (40 mg), the lowest VA price for a year’s treatment was $214.45, while the lowest Part D plan price was $1,110.96, a difference of $896.51 or 418 percent.
• For Fosamax (70 mg), the lowest VA price for a year’s treatment was $265.32, while the lowest Part D plan price was $727.92, a difference of $462.60 or 174 percent.
• For Xalatan (0.005%), the lowest VA price for a year’s treatment was $279.84, while the lowest Part D plan price was $555.96, a difference of $276.12 or 99 percent.

As of April 2006, the gap between the lowest and highest prices that different Part D plans charged for the same drug was sizable'

• Among the top 20 drugs prescribed to seniors, the median difference between the lowest and highest prices that Part D plans charged for the same drug was 36 percent, a difference of $202.02 for a year’s treatment. In other words, for half of the 20 drugs, the highest price charged by any Part D plan was at least 36 percent higher than the lowest price charged by a Part D plan.
• For 18 of the drugs, the difference between the lowest and highest price charged by a Part D plan for a year’s treatment was more than $100.
• For three of the top 20 drugs, Nexium (40 mg), Prevacid (30 mg), and Zocor (20 mg), the difference between the lowest and highest Part D plan price for a year’s treatment was more than $500.
  • For Nexium (40 mg), the difference between the lowest and highest Part D plan prices was $801.60 for a year’s treatment.
  • For Prevacid (30 mg), the difference between the lowest and highest Part D plan prices was $787.80 for a year’s treatment.
  • For Zocor (20 mg), the difference between the lowest and highest Part D plan prices was $500.64 for a year’s treatment.