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Medicare’s ‘Donut Hole’: Seniors should switch by talking to doctor

Wednesday, Sept. 20, 2006

Seniors, Disabled in Medicare’s Coverage ‘Donut Hole’ Should Talk to Doctor about Switching to Cost-Effective Drugs
Switching could save hundreds a month; help ensure they still get needed medicines

(Washington, D.C.) – As millions of seniors and disabled fall into the Medicare Part D “donut hole” coverage gap in coming weeks, Consumer Reports Best Buy Drugs urges beneficiaries to talk to their doctor about switching to cost-effective medications that will dramatically cut their out-of-pocket costs for prescriptions.
“Many seniors and disabled are now finding they have to pay the full cost of their prescriptions due to the Medicare coverage gap, which is a very scary proposition for those on fixed incomes,” said Gail Shearer, health policy director for Consumers Union, publisher of Consumer Reports.
“We urge beneficiaries to talk to their doctors about switching to low-cost, effective drugs so they don’t have to choose between their needed medications and basic necessities,” Shearer said.
Consumer Reports Best Buy Drugs identifies cost-effective medications that can save Medicare beneficiaries thousands of dollars a year over high-priced, brand-name prescription drugs. The FREE web site, www.CRBestBuyDrugs.org, cuts through drug industry marketing and offers independent analysis of prescription drugs based on effectiveness, safety and price.
The savings can be dramatic. For example, if a beneficiary was taking five prescription drugs for cholesterol, high blood pressure, arthritis pain, heart disease and depression, the potential savings from switching from a brand-name to a Best Buy drug, would be more than $400 a month or $5,184 per year (see chart below).
“Many Americans don’t realize there are safe and effective alternatives to the high-priced prescriptions they are being prescribed,” Shearer said. “Medicare beneficiaries especially need to know they have options than can save them significant amounts of money.”
It is estimated that between 3.4 million and 6.9 million Medicare beneficiaries will hit the coverage gap this year. The ‘donut hole’ kicks in under most standard Medicare plans after Medicare and a beneficiary spend a total of $2,250 on medicines. Coverage is resumed only after the beneficiary pays another $2,850 out of their own pocket.
Consumers Union supports legislation in Congress that would allow Medicare to negotiate lower prices from the drug industry, and use those savings to help close the donut hole coverage gap. Congress specifically prohibited price negotiation when it approved the drug benefit, even though the Department of Veterans Affairs negotiates savings of more than 40 percent for its beneficiaries.
The importance of getting the best price for Medicare beneficiaries and taxpayers, including the use of effective generic-equivalent drugs, will be discussed at Thursday’s Senate Subcommittee on Aging. Bill Vaughan, senior policy analyst with Consumers Union, will be testifying before the panel. For his comments, click here.

(1) These prices were obtained from www.drugstore.com on Sept. 18, 2006. Note that some adjustments were made to get a comparable number of pills per prescription on the drugstore.com website.
Susan Herold, 202-462-6262