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3.6 Million Benefit From Smaller 'Doughnut Hole'

MANAGED CARE February 2012. © MediMedia USA
News & Commentary

3.6 Million Benefit From Smaller 'Doughnut Hole'

MANAGED CARE February 2012. ©MediMedia USA

Managing seniors with chronic conditions might get a little easier as the Centers for Medicare & Medicaid Services reports that the doughnut hole is shrinking, thanks to a deal reached by the Obama administration and pharmaceutical companies as part of the Affordable Care Act.

Of course, this being an election year, the story will probably not end there, and the numbers might be disputed. Closing the gap in coverage under Medicare Part D — where beneficiaries have to pay for their drugs for a period between where their regular coverage ends and catastrophic coverage begins — is something that causes concern among all players.

As we reported in November 2009, “The doughnut hole has been a bad idea for the drug companies as well as beneficiaries because ... the companies have discovered that once a Medicare beneficiary reaches the doughnut hole and starts paying for his drugs entirely out of his own pocket ... he either shifts to generic drugs or stops taking his medications altogether” (Read “Everybody Wants to Close the Doughnut Hole” at http://bit.ly/woyAmR).

Pharmaceutical companies will pay $85 billion over the next 10 years to reduce the costs of the doughnut hole to members. CMS says that in 2011 “seniors and people with disabilities who reached the coverage gap in Medicare Part D coverage automatically received a 50 percent discount on covered brand-name drugs and a 7 percent discount on generic drugs.”

It is hoped that the discounts will continue to grow until the doughnut hole is closed. There’s no hassle factor for the beneficiaries; they simply buy drugs at the pharmacy and receive the discount automatically.

“In 2011, about 3.6 million Medicare beneficiaries benefited from discounts on prescription drugs in the doughnut hole coverage gap,” says CMS. “These seniors and people with disabilities received more than $2.1 billion in discounts, or an average of $604 per beneficiary.”

Many of these drugs are for chronic conditions.

Here are some of the drugs seniors and people with disabilities saved on:

  • Blood sugar lowering drugs — about $300 million
  • Triglyceride and cholesterol lowering drugs — about $260 million
  • Asthma and other lung related (non-cancer) disease drugs — about $230 million
  • Drugs used to lower blood pressure — about $120 million
  • Psychiatric drugs — about $102 million
  • Drugs used to prevent platelets from clotting blood — about $195 million
  • Anti-dementia drugs — about $109 million
  • Anti-depression drugs — about $73 million
  • All other drug therapeutic uses — about $627 million

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