HHS figures tell 2 stories about Medicare drug spending

Coverage has increased but discounts cut $5.7 billion in 2 years
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In Europe, the talk from pharma is how much government payers are clamping down on prices. Not to be outdone, U.S. officials have data of their own to illustrate their stinginess.

A Department of Health and Human Services (HHS) report says Medicare recipients have saved $5.7 billion on prescription drugs in the last two years since the new healthcare law added benefits to close the so-called "doughnut hole." That gap is the place where drug coverage used to fall off until Medicare users spent enough to again recover costs. In 2012, the savings were $2.5 billion--$706 a person--up a bit from the $2.3 billion in 2011, USA Today reports, citing the HHS stats.

Medicare spending has gone up to cover the gap, about $51 billion more last year, according to the Congressional Budget Office. But that is not all gravy for Big Pharma, which when the legislation was being wrestled over, agreed to discount generic drugs 21% and brand name drugs 52.5%.

Opponents of the healthcare law say the deal would prompt Medicare users to buy branded drugs and so cost the government more. Those who reach the doughnut hole spending limit do use more branded drugs while those who buy generics generally don't, USA Today reports. However, an examination by the Government Accountability Office says prescription drug costs for Medicare beneficiaries have escalated at the same rate since the law as they did before.

- read the USA Today story

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