Rising prescription costs cause more patients to fall into "donut hole"

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For the top 10 brand name drugs used by Medicare Part D enrollees, prices have increased by 5 percent or greater between 2009-2010, making beneficiaries who have reached the coverage gap, known as the “donut hole,” pay full price for prescription drug costs, according to a 2010 data spotlight published by the Kaiser Family Foundation. In 2007, 3.4 million beneficiaries reached the “donut hole,” after initial coverage limits were reached.

Currently, this coverage gap for beneficiaries is $3,610. However, according to the healthcare reform bill passed yesterday by the Obama administration, implementing the Patient Protection and Affordable Care Act Jan. 1, 2011, would take further steps to close this gap, and increase the Part D standard benefits to $5,755 in 2018.

In the Medicare Part D data spotlight, Kaiser drew upon data from the Medicare Prescriptions Drug Plan Finder reported by Medicare’s prescription drug plans (PDPs).

According to the publication, most of the beneficiaries who reach the “donut hole” have multiple chronic conditions and are treated with multiple medications, particularly expensive brand-name drugs.

“As drug prices increase over time, so too do the costs incurred by Part D enrollees—not only in the coverage gap, but also in plans that charge coinsurance rather than flat copayments,” the report noted.

The publication showed that Actonel, an osteoporosis drug treatment, had an 8 percent increase— $91 dollars per month in 2009 and $98 per month in 2010. Additionally, both costs for Aricept, a treatment for Alzheimer’s disease and Plavix, a blood thinner, rose 7 percent, from $184 to $198 per month and $142 to $152 per month, respectively.

Only one of the ten brand-name drugs, Lipitor, a cholesterol-lowering drug, experienced a decrease in cost since 2009; however, that decrease was only 1 percent.

Additionally, the study compared monthly medication costs from 2006 to 2010. According to Kaiser, monthly prices in coverage gaps increased: 20 to 25 percent for Liptor, Plavix, Nexium and Lexapro, 39 percent for Actonel and 41 percent for Aricept.

For Nexium, used to treat acid reflux, prices rose from $132 to $164 per month in 2006 and 2010, respectively. For Advair, an asthma treatment, monthly prices rose from $152 to $200 in 2006 and 2009, respectively.

“Part D enrollees who reach the coverage gap incur significant out-of-pocket costs before qualifying for catastrophic coverage—assuming they continue to take their medications,” the report stated.

As an example, an elderly woman prescribed Actonel, Aricept and Plavix, would reach the coverage gap within six months of refills and would incur costs of $488 per month. The patient would also remain in that gap for the rest of the year, paying high out-of-pocket costs for these brand name drugs where no generics are available.

The report concluded: “With many Part D enrollees at risk of forgoing needed medications or incurring high out-of-pocket spending in the coverage gap, efforts to phase out the gap could provide substantial relief for Part D enrollees who rely on multiple medications or high-cost brand-name drugs and are not otherwise helped by the low-income subsidy.