KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Benefits to Patients Unclear in Drug-Price Cuts

"The prices of hundreds of brand-name drugs are about to be cut 4%, and millions of Americans may soon receive a check in the mail as compensation for having overpaid for their prescriptions," but "the extent to which the average consumer will benefit isn't yet clear," the Wall Street Journal reports. "The price cuts and expected payments are the result of federal class-action settlements involving two drug-price publishers and a major drug wholesaler that were accused of inflating drug prices."

The price rollbacks may save $1 billion in the first year, with about $100 million of that amount "saved directly by patients, while the balance would accrue to employers and private health insurers." But critics say that "because drug pricing is so opaque and complex, patients won't likely get meaningful and long-lasting relief." Eighty-four million dollars may go to pay attorney fees, and pharmacies are still trying to stop the price rollbacks, "which could shrink their profit margins." In addition to price cuts, under the settlement, "uninsured patients who filled prescriptions for such widely used drugs as Pfizer Inc.'s Lipitor, Sanofi Aventis SA's Ambien and hundreds of other medicines between August 2001 and Jan. 23, 2009, are eligible for reimbursement checks from an about $60 million pot that has been set aside." According to testimony for the plaintiffs, the extra costs for insurers and patients comes to $2.9 billion. Many insured patients were also likely "affected indirectly because the higher costs added to a rise in health-insurance premiums." In order to qualify for the reimbursement funds, patients must have "kept good records" of their purchases and must submit claim forms by July 9 to a settlement administrator" (Rubenstein, 6/11).

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