Medicare Part D

HDMA’s Position:
HDMA continues to support a competitive model for the Medicare Part D prescription drug benefit. Part D is successfully providing affordable medications to millions of seniors. According to the Centers for Medicare and Medicaid Services (CMS), of the approximately 45 million seniors eligible for the Part D prescription drug benefit, nearly 41 million currently have some form of credible coverage, with a majority obtaining their coverage under Part D. The Part D model has resulted in improved access to medications, robust choice to accommodate multiple needs and consistent beneficiary satisfaction.

HDMA believes Medicare Part D is working as Congress intended. Private sector competition has controlled costs and improved quality. Program costs and beneficiary premiums continue to be lower than originally projected. The Part D benefit is based upon the premise that participating prescription drug plan sponsors, motivated by competition, are best able to negotiate the most cost-efficient and clinically appropriate prescription drug benefit. Changing this premise – whether it involves introducing a government-run alternative or transferring price negotiation authority to the government – could fundamentally change the structure of the Part D benefit. Dramatic changes should be carefully scrutinized to avoid unnecessary harm to a new program that is meeting and, in many cases, exceeding its intended purpose.

Issue:
The “Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003” established the Part D drug benefit. Medicare began offering coverage options to eligible beneficiaries beginning in 2006. The MMA legislation provides seniors and people with disabilities with the first comprehensive prescription drug benefit ever offered under the Medicare program. Part D is a relatively new federal program and is widely considered one of the most significant improvements to senior healthcare in nearly 40 years.

As CMS and various stakeholders have gained experience in administrating the program, a number of issues have been identified for possible improvement, such as eliminating the coverage gap commonly known as “the doughnut hole,” strengthening low-income seniors’ benefits, clarifying plan differences and streamlining payments to pharmacies. Some issues were addressed in the “Medicare Improvements for Patients and Providers Act” (MIPPA), which was signed into law on July 15, 2008. As advocates and stakeholders continue to seek ways to improve the program, a number of legislative options have been introduced as potential ways to improve the efficiency, quality and sustainability of the Part D benefit. Chief among them are providing an alternative government plan to compete with private plans and allowing the Secretary of Health and Human Services to negotiate prescription drug prices on behalf of beneficiaries. Any proposed changes to the Part D benefit should be carefully evaluated to ensure the continued success of the program for years to come.

About HDMA
HDMA is the national association representing primary healthcare distributors, the vital link in the healthcare system. Each business day, HDMA member companies ensure that more than nine million prescription medicines and healthcare products are delivered safely and efficiently to more than 164,000 pharmacies, hospitals, nursing homes, clinics and others nationwide. HDMA and its members work daily to provide value and contain costs, saving the nation's healthcare system an estimated $32 billion per year.