Will Drug Prices Rise Because of Medicare Doughnut-Hole Discount?

If your aging parents are counting on the new 50 percent discount to get them through the Medicare doughnut hole next year, they may be in for an unwanted surprise, suggests an article from The Washington Post. Patient advocates are expressing concern that drug companies will raise prices so half-off won’t be as cheap as you expect. The industry argues that market competition will keep prices down, but, the article points out, “the government is trying to establish much lower prices than market forces alone produced.” From the article:

Some of the most expensive drugs taken by people in the doughnut hole face minimal competition from generics or brand-name alternatives, making them particularly susceptible to price inflation, said Brit Pim, vice president of government programs development at benefits manager Express Scripts. Those include “specialty medications” for complex diseases, he said.

And then there are the medicines not on the market yet: “As new drugs are introduced, manufacturers will probably factor the doughnut discount into their pricing, said Daniel N. Mendelson, chief executive of [the consulting firm] Avalere.” The full article is available here: “Medicare ‘Doughnut Hole’ Relief Could Be Offset by Higher Prescription Drug Prices.”

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