The cost of prescription drugs did not increase for Medicare beneficiaries after a provision in the Affordable Care Act that requires drugmakers to grant discounts to beneficiaries who reach the so-called "doughnut hole" in Part D coverage took effect, according to a Government Accountability Office report, Modern Healthcare reports (Zigmond, Modern Healthcare, 10/28).
ACA called for Medicare beneficiaries in 2010 to receive one-time, $250 rebates when they reached the doughnut hole. In 2011, the rebate was replaced by a 50% discount on brand-name drugs. The law will increase that discount gradually until 2020, when the coverage gap will be closed.
Critics of the ACA predicted that the discounts would result in drugmakers charging more to individuals who are not within the coverage gap.
However, the report found that the cost of 77 brand-name drugs used by Medicare beneficiaries increased by 36% for beneficiaries within the doughnut hole between January 2007 and December 2010 -- before the provision took effect -- and by 35% for beneficiaries not in the coverage gap.
From December 2010 to December 2011, after the provision took effect, prices increased by 13% for both groups, according to the report.
HHS Announces Savings
The GAO report comes after HHS officials last week announced that Medicare beneficiaries have saved $4.8 billion on prescription medications since the enactment of the ACA, in part because of the provision designed to close the coverage gap (Kennedy, USA Today, 10/29).