Enter Your Email Address to Receive a
Copy of MedicExhange Member Demograhpics

In 2006, when the government began offering prescription drug coverage for seniors through Medicare Part D, the goal was to increase utilization of prescription drugs by the elderly who may not have been able to afford them before, and also to lower the average price of these drugs. The idea was that insurers—representing all the new Medicare Part-D recipients—would be able to use the clout of having this huge market to negotiate price discounts with pharmaceutical companies.

Studies since then—like this one from The Annals of Internal Medicine—have found that Medicare Part D “appears to have led to modest savings and modest increases in drug use by older people.”  With a new provision coming from the Affordable Care Act that aims to help “fill the donut hole” that seniors experience in coverage, these effects should be heightened.

But two new studies have revealed some unintended consequences of Medicare Part D. According to an AARP Rx Price Watch report released today, the retail prices for some of the most popular brand-name drugs sold to seniors increased 41.5% over the last five years, while the consumer price index rose only 13.3%. For example, the drug Flomax (which began facing generic competition this year and is usually prescribed for incontinence due to prostate problems), had the biggest price jump, climbing 24.8% in 2009. Over the past five years, Flomax increased in price by an alarming 92%. Other popular name brand drugs that experienced sharp price increases over that time span include the respiratory drug Advair (40%), the Alzheimer’s drug Aricept (40%), Nexium (28%) and Lipitor (24%)

Granted, some 75% of prescriptions are filled generically and some have actually decreased in price in the last few years. But the AARP report found; “For those taking drugs for a chronic condition, the average retail cost of brand-name medications in 2005—the year before Medicare Part D was implemented—was $1,049. By 2009, that had jumped about 32 percent to $1,382.”

Another unintended consequence of the Medicare Part D benefit is a rise in the overuse—or rather the inappropriate use—of antibiotics by seniors. In an article that appears in the Aug. 9 Archives of Internal Medicine, researchers looked at more than 35,000 Medicare beneficiaries and found that the drug benefit was having a beneficial effect on the treatment of pneumonia—a common illness that can be very serious in seniors. Those with Medicare Part D experienced triple the rate of antibiotic treatment when compared with those who previously lacked drug coverage. The authors conclude, “Given the high mortality associated with community-acquired pneumonia among the elderly, the finding that changes in drug coverage improve the likelihood of treatment is encouraging.”

But the study also unearthed a more troubling finding: “[W]e also found increases in antibiotic use for other acute respiratory tract infections (sinusitis, pharyngitis, bronchitis and non-specific upper respiratory tract infection) for which antibiotics are generally not indicated,” the authors conclude. “Our findings suggest that changes in drug coverage among the elderly may exacerbate problems with antibiotic overuse.”

Antibiotic use increased among older adults with Part D (as compared with before they had coverage), with the largest increases in prescriptions occurring for newer, broad spectrum drugs that can cost up to $30 per day, versus just $1 per day for basic penicillin. This is a problem for two reasons. First of all, inappropriate use of antibiotics is a major factor in the troubling emergence of antibiotic-resistant bacteria, especially the type that are spread throughout hospitals. Secondly, the tendency for doctors to prescribe newer, more expensive antibiotics—at times inappropriately—drives up Medicare costs at a time when austerity is the word of the day.

What are the lessons from these two new studies? Medicare Part D has been a godsend for many seniors—allowing them access to drugs that they otherwise might not be able to afford. But the benefit has also led to overuse of medications and unsupportable price increases in name-brand drugs. The AARP is calling “for action by Congress and the drug industry to bring more competition and transparency to the marketplace.” One place to start is to allow Medicare to more aggressively negotiate with drug companies on prices for name-brand drugs. In the case of the overuse of antibiotics—the authors of the Annals study suggest greater cost-sharing by Medicare recipients when their doctors write prescriptions for antibiotics to treat colds or other conditions when their use is unwarranted.

Read More: http://www.healthbeatblog.com/2010/08/new-studies-highlight-unintended-consequences-of-medicare-drug-benefit.html