Friday, July 25, 2008

Medicare Part (D)isaster: A $3.7 Billion Boondoggle for Pharmaceutical Companies

Medicare Part D a boon for drug companies, House report says
Taxpayers pay up to 30% more for prescriptions under the privately administered program than under Medicaid, the House Committee on Oversight and Government Reform finds.

WASHINGTON -- U.S. drug manufacturers are reaping a windfall from taxpayers because Medicare's privately administered prescription drug benefit program pays more than other government programs for the same medicines, a House committee charged in a report Thursday.

The House Committee on Oversight and Government Reform found that taxpayers are paying up to 30% more for prescription drugs under Medicare's privatized Part D program for seniors and the disabled than under the government's Medicaid program for the poor.

"Medicare Part D has given the major drug companies a taxpayer-funded windfall worth billions of dollars," said committee Chairman Henry A. Waxman (D-Beverly Hills).


In the two years Medicare Part D has been in effect, drug manufacturers have taken in $3.7 billion more than they would have through prices under the Medicaid program, committee investigators found.

"The drug companies are making the same drugs. They are being used by the same beneficiaries. Yet because the drugs are being bought through Medicare Part D instead of Medicaid, the prices paid by the taxpayers have ballooned by billions of dollars," Waxman said.

He said Bristol-Myers made an additional $400 million from higher prices for a single drug, the stroke medication Plavix.

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