Part D helps drug companies the most

In a recent column, David Broder wrote glowingly of the accomplishments of Mike Leavitt, the outgoing head of the Department of Health and Human Services regarding the prescription drug benefit Medicare Part D.

Mr. Leavitt announced the program a success and stated costs were running almost 40 percent below the original budget.

I would like to point out that since Congress narrowly approved this benefit in 2003, the expected cost rose from $395 billion over 10 years to a cost of $964 billion.

It is instructive to look at who is benefiting from this program.

Medicare Part A (hospital) and Part B (outpatient care) are administered by the government. Medicare Part D is administered by insurance companies. The Committee on Oversight and Reform reports that the administrative costs, sales expenses, and profits of these Part D insurers result in significant extra costs to taxpayers and Medicare beneficiaries.

Billions of dollars would be saved if these middlemen were eliminated.

Pharmaceutical companies have also seen additional profits thanks to Medicare Part D. Since this program went into effect, the average list price for the 25 most popular drugs used by beneficiaries has increased by 8.9 percent, almost twice as fast as the inflation rate. In the 6-month period following the start of Medicare Part D, the profits of the 10 largest pharmaceutical manufacturers increased by $8 billion due to this program.

What we need is a drug benefit administered by Medicare, with the government negotiating prices with drug manufacturers based on volume.

Imagine the economic boon to the pharmaceutical industry, insurance companies, and their CEOs if they became involved in Parts A and B, as Mr. Leavitt advocates!

The Medicare Part D program needs to be overhauled so that it is designed to benefit Medicare participants instead of pharmaceutical corporations and the insurance industry.

Sherie Palmer

Gurnee