Lower drug prices could eliminate coverage gap in Medicare prescription...( Medicare could eliminate the coverage g...),Health

Medicare could eliminate the coverage gap in its prescription drug benefit if it paid pharmaceutical prices comparable to those paid by citizens of Canada, the United Kingdom and France, according to a report by researchers from the Johns Hopkins Bloomberg School of Public Health and Pennsylvania State University. In their report, the authors propose that the amount paid for drugs in Canada, the United Kingdom and France is a reasonable international benchmark for pharmaceutical prices in the United States and is similar to the level of price discount necessary to eliminate the so called "doughnut hole" in the coverage gap and still keep Medicare spending at the same level. However, the potential impact of manipulating drug prices in the U.S. could decrease the funds drug companies invest in research and development, which may limit the number of new drugs introduced into the market. The study, "Doughnut Holes and Price Controls," is a July 21 Health Affairs web exclusive. The complete article is available, free of charge, at http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.396.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 does not pay for a percentage of participants' prescription bills if they total $2,250 to $5,100. This gap in coverage is often known as the doughnut hole. The doughnut hole, according to the researchers, was designed to hold Medicare drug spending below $400 billion over a 10-year period.

Lead author, Gerard Anderson, PhD, a professor in the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health, said, "Congress will have to make a choice. There is the potential for seniors to have substantially better access to pharmaceuticals, if drug prices are lowered. However, the trade-off could be that fewer new drugs would be introduced into the mar
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Contact: Kenna L. Lowe
paffairs@jhsph.edu
410-955-6878
Johns Hopkins University Bloomberg School of Public Health
21-Jul-2004

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