The Main Reason Medicare Part D Cost Less than Expected Is the Drug Companies Stopped Innovating

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Thursday, 14 March 2013 07:22

Paul Howard celebrates the lower than projected cost of the Medicare prescription drug program and attributes it to the role of private insurers. In fact, the main reason that Part D has cost less than projected is that the rate of increase in drug prices overall has been far less than projected. This in turn is attributable to a sharp fall in the number of breakthrough drugs.

If Howard wants to blame the collapse of innovation on the use of private insurers to deliver the Medicare drug benefit then he may have a case that the private insurers were central to controlling costs. Otherwise, he's killing electrons for nothing.

 

Thanks to Robert Salzberg for calling this one to my attention.