Average Beneficiary Total Out-of-Pocket Savings of 38 Percent, or $1,200, Forecast for ‘06

PCMA Analysis Medicare Part D Coverage Gapa

(Washington, DC)—Increased use of generic drugs and mail-service pharmacies has the potential to delay â?? or avoid altogether â?? Medicare beneficiaries’ entry into the Medicare Part D “donut hole” coverage gap by an average of 74 days, according to a new analysis released today by the Pharmaceutical Care Management Association (PCMA).

PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug benefits for more than 200 million Americans with health coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D. PBMs typically save consumers and payors an average of 25 percent on prescription drug costs compared to unmanaged expenditures. PBMs employ a wide range of tools and techniques to drive down the cost of prescription drugs and expand access, including generic drugs and mail-service pharmacies.

“While most seniors this year will avoid the Medicare Part D coverage gap altogether, for those seniors at risk in ‘06 there are two proven tools ready-made within their Medicare drug plans to help them: generic drugs and mail-service pharmacies,” said PCMA President Mark Merritt. “Regrettably, too many beneficiaries are not taking full advantage of the cost-saving tools within their Medicare drug plans. All stakeholders need to work together to make beneficiaries better aware of how to maximize their Medicare prescription drug coverage, including increased use of generics and mail-service pharmacies.”

In 2006, most Medicare beneficiaries will avoid the Medicare Part D coverage gap altogether. According to an August 2006 report from the Centers for Medicare & Medicaid Services (CMS), 72 percent of Medicare beneficiaries with prescription drug coverage are enrolled in plans that do not have a Part D coverage gap. CMS estimates that 28 percent of individuals with Medicare drug coverage are in plans that do have a coverage gap, although not all of these beneficiaries will actually enter the coverage gap.

For those seniors at risk of entering the Medicare Part D coverage gap, PCMA examined the effect that increased use of generics and mail-service pharmacies would have on delaying entry into the coverage gap. Specifically, PCMA assembled five patient profiles comprised of both brand-name and generic drugs used to treat five primary conditions and assorted related conditions: high-blood pressure; diabetes; heart disease; chronic obstructive pulmonary disease; and Alzheimer’s disease. PCMA examined four national Medicare prescription drug plans providing coverage to more than 50 percent of all PDP beneficiaries. Among the key findings of PCMA’s analysis:

Beneficiaries can save a total of about 38 percent â?? or more than $1,200 in 2006 â?? in out-of-pocket costs through the increased use of generic drugs and mail-service pharmacies.

For patients with high-blood pressure and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 61 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $1,226 or about 36 percent.

For patients with diabetes and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 157 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $2,081 or about 57 percent.

For patients with heart disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 76 days of Part D drug coverage. For this profile, seniors would avoid entering the Medicare Part D coverage gap altogether. The total out-of-pocket savings would be $1,221 or about 57 percent.

For patients with chronic obstructive pulmonary disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 65 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $1,504 or about 42 percent.

For patients with Alzheimer’s disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 13 days of Medicare Part D coverage and delay entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $38 or about 1 percent. The drugs contained within this profile contained very few generic alternatives.

In January 2006, researchers at the Centers for Medicare & Medicaid Services (CMS) announced that the rate of growth in prescription drug spending in 2004 fell to a ten-year historic low of 8.2 percent. As recently as 1999, the rate of growth had been more than twice that level. CMS researchers identified four key factors driving the rate of growth in drug spending down, including an increased use of generic drugs and mail-service pharmacies.

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through small businesses, Fortune 500 employers, health insurers, labor unions, and Medicare.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605