Medicare Drug Benefit - A Rising Tide Raises All…Prices?

Tom Curb, R.Ph., Consultant

First I need to make it clear that I did then and still do support Medicare’s 1960’s medical benefit. Anyone who has seen the elderly sick and dying from lack of medical care would, too. But there are major differences between this "funded" drug program and the medical benefit: (1) The medical benefit is universal, and (2) providers did not design it – in fact, most feared its revenue impact and opposed its implementation. I recall only one "country" doctor who embraced it, exclaiming, "Now I’m going to be paid for services that I have been giving away for years."

Because medical providers could not charge other payers less than they charged Medicare, for two decades - until price controls were imposed in the 1980’s - lobbyists manipulated the program, and healthcare costs increased for everyone. I vividly remember when our hospital’s inpatient charge for a 65 cent bottle of aspirin increased overnight to $100 – simply because Medicare would pay that much – so everyone else had to pay at least that amount, too. Because of Medicare’s "cost-based reimbursement" other healthcare services also inflated exponentially.

Earlier, I predicted that Medicare’s funded drug "benefit" would follow the inflationary pattern of the initial medical benefit – and it is doing so "in spades". Even greater excesses were projected since - unlike the medical benefit - Rx providers, Medicare-PBMs, insurers, and the multinational drug cartel were allowed to design the program for their own benefit – not for that of recipients.

Case in Point: For months my "Medicare HMO" charged a cash price of $20.30 for 100 tablets of my thyroid supplement. Yes, I felt that this was a little high, since more than 15 years ago as an agent for that same institution, I got them the same brand, same manufacturer for about $3 and the generic for less than a dollar.* Obviously I was pleased when last week’s refill receipt showed my "copay" at only $16 – finally a price decrease! Then I took another look at the receipt.

In an area where usually was noted, "TP Paid: $00", it now showed, "TP Paid: $14.48". I asked its meaning, and the reply was, "The $14.48 is what your insurer paid." I said I had no insurer. When asked if I was enrolled in Medicare, I said, "Yes". "Did you enroll in Plan D?" I said, "No". "Well, we enrolled you automatically." "Then you can now disenroll me automatically."

I now find that I can get my drug’s equivalent, market leading, brand-name, $60-plus (in the US) competitor from our Canadian friends for under $20. Guess where I’ll get my next refill.