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Will Mainers Start to Import More Drugs in Light of Mainecare Cuts

A couple of news articles from the state of Maine have me wondering if more Mainers are going to start importing medication from international online pharmacies. Maine is the only state that has, through the passage of a law, removed state restrictions on personal drug importation from pharmacies in a number of countries.

An article from the Sun Journal highlights a survey designed to track the impact of the Affordable Care Act in Maine (and perhaps these findings will apply to other states, too). Both low and middle-income Maine adults are struggling with medical bills. Surprisingly, 35% of middle-income adults had problems paying bills, compared to 32% of low-income adults. Budget cuts in the state have led to thousands of residents losing Medicaid coverage, so it is likely that the numbers will worsen for low-income adults.

Speaking of budget cuts, Maine Governor Paul LePage did not choose to expand another state program, Mainecare, which helps low-income residents pay healthcare providers. Samantha Edwards, writing for WLBZ, notes that residents who were in these programs are now looking elsewhere for assistance, especially for prescription drugs. The cuts to state programs are forcing municipalities to cover the costs. Rindy Folger, of Bangor Health and Community Services, said, “Since January 1st, we have seen over seventy-five people who we have never seen before who are now coming in looking for help with their medications…Monthly right now we are paying about $9,500 in prescriptions which, over the course of the year, is a significant amount of money for the Bangor taxpayers to have to pay.”

If municipalities like Bangor are going to be picking up the tab for medication, it might be wise for them (or the state) to implement prescription drug importation programs. Portland saved $200,000 a year on health care when it served prescriptions to its employees through PortlandMeds, a prescription drug importation program. It’s very possible – and reasonable – that more municipalities will implement these programs if the Maine’s healthcare cuts continue.

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Struggling To Afford Meds, Americans Spend More On Drugs than Other Countries

As recently reported by PBS, America continues to outspend other rich countries on pharmaceuticals, spending almost $1,000 per person on prescription drugs in 2013. Canada, the second highest spender, spent about $700 per person. This is despite one in five Americans skipping doses or a script due to cost, as well as an extremely high percentage (84% in 2011) of prescriptions being written for generic medications.

So what’s up? Well, for one, our drug prices are much higher. Our latest analysis of brand-name drugs sold by international online pharmacies found that their prices were 88% lower when compared to a pharmacy in New York City.

Major drug price differences aren’t the only reason for higher U.S. spending. PBS explains that Americans, sadly, fill more scripts due to higher rates of obesity, diabetes, and high blood pressure, which of course equates with greater numbers of prescription drug purchases. Another factor is that it’s relatively easy for drug companies to get new drugs approved and in to the U.S. market.

I was a bit surprised that PBS didn’t mention direct-to-consumer advertising as a possible reason for why we use more drugs. New Zealand is the only other country that allows direct-to-consumer advertising, but they have much lower drug prices than the U.S.,  due to government regulations.

For the newly insured, Obamacare might mean lower prices for consumers, but that doesn’t mean overall national spending will go down. Lower out of pocket costs from better co-pay or co-insurance models will likely just mean higher premiums and increased reimbursement to drug manufacturers by insurance companies. Look at it this way: if you spend $20 less on a drug per month, but your premium is $20 more, you’re not really any better off.

Interestingly, U.S. drug spending decreased slightly last year, thanks largely to patent expirations resulting in more generic drugs penetrating the market. While PBS mentions that the decline is expected to last another 2-3 years, I’m not so optimistic. For one, generic drug prices are rising, sometimes by thousands of percent. Second, more coverage under Obamacare means more prescriptions, and naturally more spending. Only time will tell…

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The Windy Road To Closing the Donut Hole and the Future of Medicare Part D Under Obamacare

Your prescription drugs will never be free under Medicare Part D. The “closed” donut hole under Obamacare does not create a new coverage period under Part D during which your co-pays and co-insurance, not to mention deductibles and premiums, disappear. That’s not a reason to complain. We should shoulder costs for our healthcare, including medication, as long as they are affordable (after all, Obamacare is actually called the Affordable Care Act). So how does Obamacare strive to help you afford your prescription drugs if you’re on Medicare? First, a little history…

In the beginning, Medicare did not offer a prescription drug benefit and tens of millions of seniors paid for their medications entirely out-of-pocket. Let there be light: In 2003, Congress passed the Medicare Modernization Act, which was then signed into law by President Bush. That law gave birth to Part D – a prescription drug benefit available to Medicare enrollees. But there were holes! When Medicare Part D plans first launched in 2006, average monthly premiums were $25.93. After paying a standard deductible of $250, enrollees paid 25% of their drug costs until total drug costs (between the enrollee and insurer) reached $2,250. That’s $250 towards the deductible, $500 in cost-sharing, plus premiums of $311.16 for a total of $1,061.16 per year in out-of-pocket spending. That’s if you stayed out of the donut hole!

Enter the dark days of the “donut hole,” which, in 2006, meant 100% out-of-pocket spending between $2,250 and $5,100 – Ouch!  Above $5,100 – an amount called, for good reason, “catastrophic costs” –enrollees only paid 5% of their drug costs. Part D maintained these basic components, except with rising costs in the form of higher premiums and deductibles, and a larger “donut hole,” until the passage of the Patient Protection and Affordable Care Act in 2010 – enter Obamacare (hope and change?).


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