Some Democrats already believe Medicare Part D is a “Republican-engineered windfall†for pharmaceutical companies, but the good fortune may not last, say the experts. (Philadephia Inquirer)
According to Verispan, a health information company, Medicare Part D accounted for as much as 13.6 percent (Bristol-Myers Squibb) of drugs sales from January to July. Medicare Part D prescription drugs accounted for 8.8 percent of Pfizer’s retail sales, 10.9 percent of Merck’s, and 9.5 percent of Eli Lilly’s. The national average is 8.5 percent.
The Inquirer also cites a report titled The Long and Winding Road Ahead: Medicare Part D, Post 2006 (PDF), which indicates the good times may not roll for long. From the report:
IMS foresees that just a few years into the program, the unrelenting financial pressures of maintaining and managing the benefit will begin to take its toll. HHS estimates that the net cost to the federal government will nearly double between 2006 and 2009, rising from $37 billion to $67 billion, and the cost over the first ten years will be $725 billion.
In other words, as the cost of maintaining Medicare Part D rises, the federal government may cover only those drugs that are most cost-effective (generic?), which may hurt drug companies’ financial bottom line.
