The Kaiser Family Foundation (KFF) released a brief examining rising brand-name drug prices in the Medicare coverage gap, or “doughnut hole.”  The KFF found that brand-name drug prices increased for seniors in standalone Medicare Prescription Drug Benefit Program (Part D) drug plans.  According to the KFF, prices increased at least 5 percent since January 2009 for half of the 10 most common brand-name drugs that lack generic substitutes.  Under Part D, enrollees must pay the full cost of their drugs after reaching their initial coverage limit ($2,830 in 2010) until they reach the threshold for catastrophic coverage ($6,440 in 2010).

From the report:

A unique feature of the Medicare Part D drug benefit is the coverage gap, or so-called “doughnut hole,” where Part D enrollees are required to pay 100 percent of total drug costs after their spending exceeds the initial coverage limit, before qualifying for catastrophic coverage.  The coverage gap in the Part D standard benefit is $3,610 in 2010 and is projected to increase to $5,755 by 2018, under current law.  Part D enrollees who reach the coverage gap are likely to have multiple chronic conditions and take either several medications or a smaller number of relatively expensive brand-name drugs.  An estimated 3.4 million Part D enrollees (14 percent of all enrollees and 26 percent of those using prescription drugs and not eligible for the low-income subsidy) reached the coverage gap in 2007.  Health reform legislation that would gradually close the coverage gap is pending.

Full report:  Medicare Part D 2010 Data Spotlight: Prices for Brand-Name Drugs in the Coverage Gap (PDF | 109.37 KB)

The Kaiser Family Foundation.  (2010).  Medicare Part D 2010 data spotlight: prices for brand-name drugs in the coverage gap.  Cubanski, J., Neuman, T., Hargrave, E., Hoadley, J. and Summer, L.