Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
February 8, 2016

Drug Coverage Premiums and Spending Forecast Remain Low

The Department of Health and Human Services  has announced a slight increase in the Medicare Part D program’s premiums for next year. The prescription drug benefit, first implemented in 2006, now offers drug coverage to 39 million people.

Also, the Congressional Budget Office this week offered another illustration of  changing long-term health care cost estimates and has adjusted its outlook on spending on the Part D program.

The congressional budget scorekeeper noted that several trends in the drug market has contributed to lower spending, which are substantially less than initial estimates provided to Congress in 2003 when the program was established. The CBO noted two major drug market developments contributing to the slowing of price increases:

  • Many existing brand-name drugs lost their patent protection and faced new competition from generic substitutes, which have the same active ingredients as their brand-name counterparts but are much less expensive.
  • New brand-name drugs (which tend to be more expensive than older brand-name therapies) were introduced at a slower rate than in the late 1990s.

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