Pharmacy Benefit Managers Continue to Keep Medicare Part D Premiums Affordable

(Washington, D.C.) — Pharmaceutical Care Management Association President and CEO JC Scott issued the following statement on the open enrollment season for the Medicare Part D prescription drug benefit:

“As open enrollment begins, we are encouraged to see the continued trend of affordability and low premiums for seniors under Medicare Part D. This trend in affordability is due in large part to pharmacy benefit managers’ (PBMs) ability to negotiate deep discounts with drug manufacturers.

Unfortunately, at the same time that the Administration is rightly focused on maintaining affordability, they are considering reviving a rebate rule that would drastically increase Part D premiums for seniors – by 25% – and undermine the unprecedented success of the Medicare prescription drug benefit.”

Here are the Facts on the withdrawn Rebate Rule:

  • Part D Premiums Will Increase Dramatically: Only about 10 percent of beneficiaries would have saved more on cost sharing than they spend on premiums, while the other 90 percent would pay more. If premiums increase as much as the 25 percent suggested by the Office of the Actuary (OACT), the average monthly premium in 2020 would have increased from $38.13 to $47.66, with a proportionate increase in 2021 and future years. This would mark the largest average premium increase in the history of the program. Further, because Part D is voluntary, it could destabilize the program if higher premiums cause healthier beneficiaries to drop coverage or never sign up at all.
  • Rebates Lower Medicare Costs: Reports issued by the Government Accountability Office and Health and Human Services Office of Inspector General confirm that PBM-negotiated rebates lower prescription drug costs in the Medicare program
  • The Proposed Rebate Rule is One of Most Expensive Regulations in History: According to the Congressional Budget Office the administration’s rebate reform proposal would cost taxpayers $177 billion. The administration’s own actuaries also estimated the cost to be as high as $196 billion over 10 years, and Avalere Health estimated the proposed rule will cost taxpayers $400 billion over that time.
  • Poll: Medicare Part D Beneficiaries are Concerned about Proposed Changes to Drug Plans: Senior registered voters enrolled in Medicare Part D will be less likely to support the reelection of their members of Congress and presidential candidates if those elected officials back proposals eliminating prescription drug negotiations and price concessions that would result in Part D premium increases.
  • The Proposed Rule Does Nothing to Address Prescription Drug List Prices: The administration has continuously stated its goal to lower list prices for prescription drugs, and yet the proposed rule “intend[ed]” and speculated that manufacturers might do so. The fact is the manufacturers—and only manufacturers—set drug prices. They already could lower drug prices and have not.

Visit the PCMA website for more information