President Obama hailed it, yesterday, as a "turning point" in the reform effort, one delivered by, and also taken from the pharmaceutical manufacturers. The industry trade group, PhRMA, spun it as "additional savings" for under-insured seniors. [The President's latest full weekly address video is here.]
Merck CEO Dick Clark positioned it as going "the extra" mile -- any way one slices it, this will mean less revenue, overall for Schering-Plough-cum-Merck. But it is the right thing to do:
. . . ."Our goal is to make sure that every patient who has been prescribed a Merck medicine has access to that medicine," said Richard T. Clark, chairman, president and CEO of Merck. "Merck has been providing free medicines to Medicare Part D beneficiaries through our Patient Assistance Programs for many years. With this new proposal we will go the extra step and offer direct savings to Medicare Part D beneficiaries in the coverage gap regardless of their income". . .
You won't see this here, very often -- but on this Fathers' Day morning, I admire Dick Clark's willingness to do this -- it is the right thing. The truth probably is that he wouldn't have agreed to this -- unless he thought there were essentially no other less-onerous options.
And all the other potential options were, in fact, likely more onerous than this. That said, my hat's off to him, anyway. And this is the beginning, not the end -- of what pharma will need to "kick in" to avoid much more unfavorable pricing-related regulation in the United States (like wholesale re-importation allowances).
This analysis is from the decidedly-reddish The Hill:
. . . .The $80 billion in savings committed by drug companies on Saturday will not specifically pay to cover the estimated 47 million Americans who are uninsured.
Instead, it will be allocated to close the so-called “donut hole” of coverage in the Medicare prescription drug benefit. . . .
For years in the minority, Democrats vowed to fill in the donut hole, which force[s] enrollees to pay 100 percent of the costs of their medicines even while they continue to pay monthly premiums until catastrophic drug coverage kicks in. . . .
Finally, here is the PhRMA release:
. . . ."Under this proposed new legislative program -- which represents the first important step in health care reform -- America's pharmaceutical research and biotechnology companies have agreed to help close the gap in coverage. Specifically, companies will provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient's Part D plan when purchased in the coverage gap.
In addition, the entire negotiated price of the Part D covered medicine purchased in the coverage gap would count toward the beneficiary's out-of-pocket costs, thus lowering their total out-of-pocket spending. Importantly, the proposal would not require any additional paperwork on the part of the beneficiary nor would an asset test be used for eligibility.
Since its inception, strong competition among drug plans participating in the Medicare drug benefit has led to significant savings for seniors. On average, beneficiaries are saving $1,200 annually on their medicines, and the average low-income beneficiary saves $3,900, according to the Centers for Medicare and Medicaid Services. This agreement will help to provide additional savings to even more seniors across the nation. . . .
This is -- in truth -- only the beginning. But it is a good one.
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