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By Paul Winters
An AARP report released on Sept. 26 claimed that drug manufacturers substantially raised prices on the 144 specialty drugs most commonly used by people in Medicare Part D over the past five years.
The report from AARP's Public Policy Institute looked at what drug makers charge for specialty drugs, which include prescription medications used to treat complex, chronic conditions and require special administration, handling and care management. Prices for specialty drugs, according to the report, can range from $5,000 to more than $300,000 per year.
According to the report, the prices of specialty drugs most commonly used by Medicare Part D beneficiaries have risen faster than the general inflation rate every year since 2004, peaking in 2007 when the price spiked by 8.7% - or three times the general rate of inflation (2.9%).
BIO issued a statement to refute the findings of the study, showing that the report ignores the impact of discounts, rebates, negotiated prices and patient assistance programs that help lower drug costs.
"The AARP report on price trends for specialty drugs ignores the many factors that counter and mitigate the price trends mentioned in this analysis. The report focuses on data that is only a proxy for drug pricing in Medicare's Part D program," said BIO spokesman Jeff Joseph, vice president of communications.
"The AARP survey centers on a subset of drugs available to Medicare beneficiaries and does not take into account the discounts, rebates and other negotiated prices that evidence suggests are passed on to Medicare beneficiaries in the form of lower premiums, copayments and deductibles in the Medicare Part D program, resulting in a decrease in the overall cost of that program. These discounts, as a result of vigorous negotiation between manufacturers and Part D plans, have resulted in lower costs throughout the Part D benefit. Kerry Weems, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS), recently noted that the average monthly premiums for stand-alone drug plans in 2009 are lower than originally estimated and that it is a competitive market. He added that 97% of beneficiaries in 2009 will have access to drug coverage for the same amount or less than they paid this year.
"In addition, studies show that approximately one-third of Medicare Part D beneficiaries receive some form of assistance or subsidy that helps lower copayments, deductibles and premiums for their specialty drugs.
"The AARP survey is based on the wholesale acquisition cost (WAC) of these drugs, which does not reflect negotiated discounts and rebates between manufacturers and Part D plan sponsors, nor is it the price used by the federal government for the reimbursement of the majority of drugs and biologics used by Medicare beneficiaries in Medicare Parts B and D. The plans that contract with the government have the discretion to pass rebates through to beneficiaries at the point of sale, and plans may wish to consider doing so for specialty products. The majority of manufacturers - particularly those with specialty products - provide funding for programs that assist patients with accessing needed therapies.
"Biotechnology medicines and therapies are achieving major advances against some of the most debilitating diseases facing the world today such as cancer, multiple sclerosis and orphan diseases. Biotechnology innovators share a goal of increasing access to these life-saving and life-enhancing drugs. We look forward to participating in public health discussions that help us move toward this goal."
Paul Winters is director of broadcast media at BIO.
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