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Part D Premiums Will Increase If Manufacturers Offset Donut Hole Drug Discounts With Lower Rebates, Humana Warns

Executive Summary

Medicare Part D beneficiary premiums will increase if drug firms try to offset new 50 percent discounts on branded drugs provided to beneficiaries in the coverage gap by reducing or eliminating the rebates paid to plans, Humana VP-Pharmacy and Clinical Integration William Fleming warned at a June 1 CMS workshop

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Part D Coverage Gap Discounts Not Linked To Price Increases In 2011 – GAO

GAO found the prices for high-expenditure brand-name drugs used by beneficiaries in the Medicare Part D coverage gap and by those who did not reach the gap in 2011 increased at a similar rate before and after the discount program was implemented in January 2011.

Part D/Commercial Firewalls Aid Negotiations On Donut Hole Discount Offsets

Manufacturers often place firewalls between drug price negotiations for an insurer's commercial plans and Medicare Part D plans to avoid running afoul of federal anti-kickback statutes. This may have another benefit: providing latitude for Part D pricing that offsets the mandatory 50% discounts manufacturers will give on drugs used by Medicare patients in the donut hole.

Part D/Commercial Firewalls Aid Negotiations On Donut Hole Discount Offsets

Manufacturers often place firewalls between drug price negotiations for an insurer's commercial plans and Medicare Part D plans to avoid running afoul of federal anti-kickback statutes. This may have another benefit: providing latitude for Part D pricing that offsets the mandatory 50% discounts manufacturers will give on drugs used by Medicare patients in the donut hole.

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