Another look at the Medicare Fair Drug Pricing Act

Column by Ken Johnson

A recent op-ed in your paper (“Medicare Fair Drug Pricing Act,” Nov. 18 AFP) ignores the fact that America’s seniors are receiving unprecedented access to needed medicines at affordable costs through the Medicare prescription drug program. Medicare Part D has been a proven success for both seniors and taxpayers.

Here are the facts: Average premiums for Medicare drug coverage in 2010 are $30, only $2 more than in 2009, according to the Centers for Medicare and Medicaid Services. The 2010 premium is 40 percent lower than originally predicted when the program was established. And, seniors are saving, on average, $1,200 a year on their medicines.

What’s more, the program is costing significantly less than initially projected. Earlier this year, the nonpartisan Congressional Budget Office (CBO) reduced its 10-year forecast for the total cost of Part D by more than half a trillion dollars. Most of the reduced costs were due to lower-than-anticipated bids for providing the drug benefit coverage, according to the CBO.

As for the allegation of “windfalls” for the pharmaceutical industry, in its first year of existence, Part D lifted retail prescription volume by 1 to 2 percentage points and increased pharmaceutical sales by less than 1 percentage point, according to IMS Health.

Most importantly, the vast majority of seniors are content. A November 2009 survey by Medicare Today found that 88 percent of seniors enrolled in the program are satisfied with their coverage – an increase of 10 percentage points since the benefit began in 2006.

In addition, the op-ed presented a very narrow-minded view of direct-to-consumer advertising of prescription medicines.

Surveys show that DTC advertising brings patients into their doctors’ offices and helps to begin important doctor-patient conversations about previously undiagnosed or untreated medical conditions. In fact, a national survey by Prevention Magazine found that 29 million patients talked to their doctor for the first time about a health condition after seeing a DTC ad.

The notion that marketing drives pharmaceutical costs is contradicted by much higher research and development spending. In 2008, America’s pharmaceutical research and biotechnology companies spent $11.3 billion on promotional activities directed to physicians, journal advertising and consumer advertising, according to IMS. By comparison, pharmaceutical research companies, the same year, invested $65.2 billion on R&D of medicines.

Lastly, it’s important for your readers to know about patient assistance programs offered by America’s pharmaceutical research companies through the Partnership for Prescription Assistance (PPA). Since April 2005, the PPA has helped connect more than six million people to programs that provide medicines for free or nearly free


Ken Johnson is the senior vice president of the Pharmaceutical Research and Manufacturers of America.

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