Abby Block from CMS and John Rother from AARP

Abby says 6.4 million in PDPs…29 million have drug coverage overall (although that counts everyone).

What have they learned from Part D? A bunch of stuff about monitoring plans and their operations, appeal management, pharmacy relationships are on their mind (Surprise, surprise). Based on the applications for 2007 the program seems to be healthy. “Going to be sure that they have adequate coverage for 1–800 Medicare and going to be sure that the plans will have adequate coverage too”.

Many things that we’re still working on but the glass is more than half full.

John Rother— it’s a terrific benefit for those who are using large number of drugs/high cost, and for those who are in lower income, But it’s not meeting expectations in the enrollment of low income seniors.  That’s the group for whom  it offers the most value but we’ve only enrolled 20% of them! That’s a tragedy. the program is stable.

To make it better need to something about price/cost control, and also to remove the asset/income means testing in the premiums, as this punishes those who’ve done the right thing.

Medicare is finally taking the leadership of becoming a health care program not just a payment program, so Medicare must keep pushing. The costs that Medicare encurrs are part of the whole system, and we must address the whole system.

How well are the private companies doing in negotiating prices?

Rother—better than CBO projected, but terrible compared to any other country in the world.Block—it’s been very encouraging and the plans have had significant impact

There’s more than a little obfuscation about these numbers, especially the 29 million number. How many people over 65 now have drug coverage who did NOT have it before? Abby: that number cannot be determined! We know how many have enrolled but we don’t know what they had beforeRother: said that 1/3 last year had no benefit and 1/3 had inadequate benefit….the test of the program will be seeing that difference when the data is in. Abby: Have a huge outreach effort trying to get low income people to enroll. But that has been a huge concern.

What about delaying the penalty date?

Abby: A firm deadline makes sense., If you delay it. people will delay. This month we’re seeing a big increase, because of the deadline.John: The deadline is to encourage healthy people to enroll. Not appropriate for the low income population and that will be extended. But this may be revisited as a 7% increase on premiums may cause a political problem!

Do you feel the AARP run Part D product places the organization in a conflict of interest trough being a third party senior advocate as well a provider of the good?

John: No! We think that’s a good value plan for our members and its an arms length relationship internally.

Will there be more legislative fine-tuning?

Abby: we hope not!John: we hope so, on delaying enrollment, on formulary lock-in and demanding secretarial authority on, and perhaps requiring plan sponsors to only offer two plans.  We want fewer better choices than the mass confusion we saw earlier this year.Abby: We want stable formularies, but there is good reason to allow change when new generics come in, and some other reasons (such as drug price changes)

Will CMS provide aggregate data on what percent of mfr rebates were passed on to patients in the coverage gap?

Abby: 100% of rebates are passed on in the coverage gap (of course she doesn’t mention that rebates are just one way of hiding the money between pharma and PBM without passing it on to end customers…)

What tradeoffs do you see (and would you accept) between limiting innovation in pharmaceuticals and lowering unit costs for today? Does it make better sense to try to measure total value from enhanced Rx payments versus improvements in beneficiaries’ health status/reductions in Part A & B spending?

John: Price and innovation aren’t connected, especially with twice as much being spent on pharmaceutical  marketing as on R&D

Given the number of plans and continued questions from seniors, do you anticipate longer open enrollment periods in the coming years?

Abby: Need a longer open enrollment period and launch a campaign to get people to enroll earlier. Number of choices will be reduced as the consumer shows what they’re interested in buying. We want clearly differentiated products that beneficiaries understand.

Why has the enrollment for low income seniors been so low, as the bill was basically set up for them and benefits them the most?

Abby: Well there’s an application form, and its complicated for them. But here is a point of sale application form and people who weren’t enrolled thought they were and got it at the pharmacy

John: Only face to face enrollment works. Language and health literacy issues, and many people don’t want to fill out their information, especially about the asset test. AARP is funding a campaign through churches, and there are lots of meetings set up. But it’s slow going.

How will this be different in 5 years?

Abby: It’ll be taken for granted….John: Depends on who’s running the government; Democrats would probably get rid of asset test, have a separate benefit. The other issue is the price behavior of Rx. If they head up fast, there’ll be congressional intervention.