HHS: RX COMPETITION, GENERICS DRIVE DOWN MEDICARE RX COSTS
Stronger than expected competition in the prescription drug market and lower drug costs have driven down the overall costs of the Medicare Rx drug benefit, according to HHS officials.
The costs of the Medicare Part D benefit "are significantly less than expected," said HHS Secretary Michael Leavitt in a recent report. The federal government is projected to spend about 20 percent less per person in 2006. And over the next five years, payments are projected to be more than 10 percent lower than first estimated, Leavitt said.
"Costs are going down even as enrollment is going up," he noted. "This is good news for seniors, taxpayers and the Medicare program."
The net cost to the federal government for the Part D coverage is expected to be $30.5 billion in 2006, down from an earlier $38.1 billion estimate, said Mark McClellan, administrator of Centers for Medicare and Medicaid Services.
For the 10-year period from 2006 to 2015, the "total" Medicare drug benefit cost, without accounting for Medicaid savings, is now estimated to be about $797 billion, down $130 billion from last year's $926 billion estimate, McClellan added.
"With lower prices, more use of generic drugs, and other effective steps to slow down drug spending, the winners are the beneficiaries and the taxpayers," McClellan said.
The "Secretary's One Month Progress Report on the Medicare Prescription Drug Benefit" is available at http://www.hhs.gov/medicare.pdf (http://www.hhs.gov/medicare.pdf).