BETTER MEDICARE ALLIANCE STATEMENT ON MEDICARE PART D REBATES
Washington, D.C. – Better Medicare Alliance (BMA) President and CEO Allyson Y. Schwartz released the following statement in response to a proposed rule released by Health and Human Services Office of Inspector General’s proposed rule to remove the safe harbor protection for drug rebates in Medicare Part D:
“We are reviewing the Administration’s proposal to remove an important tool used by Medicare Part D plans to negotiate lower drug prices for beneficiaries. We share the Administration’s goal to curb rising prescription drugs and have applauded past efforts to prevent higher costs for the millions of Americans who depend on Part D, especially seniors and people with disabilities who enjoy the affordability of Medicare Advantage.
“The concern remains that this move fails to address the root cause of high prescription drug costs which starts with list prices set by drug manufacturers. Medicare Advantage-Part D (MA-PD) plans and standalone Part D Prescription Drug Plans deliver value by negotiating lower drug prices directly with drug manufacturers on behalf of consumers through the use of rebates. Using tools such as rebates, Part D plans have managed to achieve stable premiums in recent years, with the average premium having declined in the last two years. The proposed rule risks destabilizing Part D premiums for seniors.
“Studies show that rebates have reduced costs in Medicare Part D by $34.9 billion in the last four years and had they been eliminated last year Part D premiums would have risen by 52 percent in 2018 alone.
“Nearly 90% of all Medicare Advantage beneficiaries actively choose and depend on a MA-PD plan, and 53% of Medicare Advantage beneficiaries have annual incomes of less than $30,000. It is very important to carefully examine any proposal that could raise premiums for this vulnerable population.
“We encourage the Administration to pursue smart, effective policies and employ a do no harm approach to address drug pricing in Medicare.”