Case Management

CMW News: Drug industry agrees to fund portion of Medicare doughnut hole

Case Management Weekly, July 1, 2009

The Pharmaceutical Research and Manufacturers of America, following negotiations with lawmakers, announced an agreement that calls for the industry to spend $80 billion over the next decade to assist Medicare beneficiaries and defray medication costs. The agreement calls for pharmaceutical companies to pay as much as half the cost of brand name drugs for lower- and middle-income senior citizens in the so called Medicare “doughnut hole.”

The doughnut hole occurs when patients’ total drug spending has exceeded $2,400. They must pay full cost for their medications until they have spent more than $3,850. And in 2007, about 15% of the 3.4 million Medicare beneficiaries who hit the doughnut hole quit taking their medications.

The agreement with the pharmaceutical industry marked a small victory for Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, who has been negotiating with health industry groups as he was working on drafting health reform legislation with his committee.

Source: HealthLeaders Media

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