Specialty drugs strain gov't, patients

WASHINGTON, April 19 (UPI) -- Enrollees in Medicare drug plans are feeling the pressure of rising U.S. specialty prescription drug costs and are helping fill industry coffers, analysts say.

That is because many of the leading pharmacy benefit managers and drug insurers also offer Medicare Part D coverage to seniors, which allows them to profit from patients' payments as well as from federal spending, The New York Times reported Saturday.

The prices of medicines heavily used by the elderly have risen more than 24 percent since June 2006, according to two senior health economists at Harvard.

In an article published in January in the journal Health Affairs, economists Richard Frank and Joseph Newhouse said single-source unique drugs have the potential to present "important new pressures on the federal budget."

Many Part D plans segregate specialty drugs into a special tier, where a Medicare enrollee pays 25 percent to 33 percent of the price, said Jack Hoadley, a research professor at Georgetown University.

Under that arrangement, patients quickly reach the $5,726 cap on out-of-pocket spending, after which the patient pays only 5 percent. From that point, the drug plan sponsor pays 15 percent, while Medicare pays 80 percent of the cost, the newspaper reported.