Medicare Part D Plans Raised Their Prices for

Part D Drug Prices Increased by 3.7 Percent over the Past Five Months

Washington, D.C. – Over the past five months, virtually all Medicare (Part D) plans raised their prices for the top drugs prescribed to seniors, according to a report issued today by the health consumer organization Families USA. The report, based on pricing data submitted by the plans to the federal government, contradicts the Bush Administration’s assertions that the new Medicare drug program is effectively moderating rising drug costs.

The Families USA report examines Part D plan prices for the top 20 drugs prescribed for seniors. It found that:

• 100 percent of Part D plans raised their prices for Zocor (40 mg), a cholesterol-lowering drug.
• Almost 99 percent of Part D plans raised their prices for Fosamax (70 mg), a drug used to treat osteoporosis.
• More than 97 percent of the plans raised their prices for Lipitor (10 mg), a cholesterol-lowering drug.
• More than 96 percent of the plans raised their prices for Actonel (35 mg), Toprol XL (50 mg and 100 mg), and Xalatan (0.005%), drugs used for osteoporosis, high blood pressure, and glaucoma, respectively.
• More than 94 percent of the plans raised their prices for Celebrex (200 mg), Nexium (40 mg), and Norvasc (5 mg), drugs used to treat pain, gastrointestinal problems, and heart problems, respectively.
• More than 92 percent of plans raised their prices for Aricept (10 mg), and 89 percent raised their prices for Plavix (75 mg), drugs used for Alzheimer’s disease and stroke, respectively.  

“At the same time that the Bush Administration and congressional leaders are touting the effectiveness of the Medicare drug plans, those plans are quietly raising the prices that they charge,” said Ron Pollack, Executive Director of Families USA. “As a result, seniors will pay more and more—as will America’s taxpayers.”

According to the report, only the prices for the generic drugs furosemide (40 mg) (a diuretic) and metoprolol tartrate (50 mg) (a drug for high blood pressure), and the brand-name drug Zoloft (50 mg) (an antidepressant) were not raised by a majority of the Part D plans.

The report examined Medicare plan price changes from mid-November 2005 (when enrollment in the new program began) to mid-April 2006.  During that time, the median price for the top 20 drugs rose by 3.7 percent. Three of the drugs, Celebrex (200 mg), Lipitor (10 mg), and Aricept (10 mg), rose by 6 percent or more.

One of the most significant findings in the report is that, for 19 of the top 20 drugs, changes in the median Part D plan prices were virtually identical to the changes in Average Wholesale Price (AWP) established by the drug manufacturers. “This means,” according to Pollack, “that Part D plans are doing essentially nothing to contain the fast-rising prices by the drug industry.”

The Families USA report also compared Part D plan prices with the prices negotiated by the Department of Veterans Affairs (VA). According to the analysis, for every one of the top 20 drugs prescribed to seniors, the lowest price charged by any Part D plan was higher than the lowest price negotiated by the VA. The median price difference as of mid-April 2006 was 46 percent.

Among the biggest variations between prices negotiated by the VA and those established by Medicare plans were the following drugs:

• For Zocor (20 mg), the lowest annual VA price in mid-April was $127.44, while the lowest Part D plan price was $1,275.36, a $1,147.92 difference, or 901 percent.
• For Protonix (40 mg), a gastrointestinal agent, the lowest annual VA price was $214.45, while the lowest Part D plan price was $1,110.96, a $896.51 difference, or 418 percent.
• For Fosamax (70 mg), the lowest annual VA price was $265.32, while the lowest Part D plan price was $727.92, a $462.60 difference, or 174 percent.
• For Xalatan (0.005%), the lowest annual VA price was $279.84, while the lowest Part D plan price was $555.96, a $276.12 difference, or 99 percent.

“When Congress prohibited Medicare from bargaining for cheaper drug prices, it created a huge windfall for the drug companies and unaffordable prices for America’s seniors,” said Pollack. “It is time to correct this and to establish an effective price negotiating system like the VA has achieved.”

For a copy of the report and to review the methodology, please visit our Web site at www.familiesusa.org.

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org