What Will Part D Prices Look Like in 2007?

Big Pharma companies say its too early to tell what prices will look like under Medicare Part D next year. That is in part because they can't be sure yet what prices they will get in 2006. That won't be clear until claims are reconciled this fall.

The question came up on almost all the Big Pharma company second quarter earnings calls: What will happen to prices under Medicare Part D in 2007? As has become abundantly clear, most pharma companies saw a net price increase from the transition to Part D this year, since more than six million Medicare beneficiaries previously receiving coverage under Medicaid (with mandatory rebates) transferred to the new program. (See "Big Pharma’s Secret Weapon," The RPM Report, July/August 2006 Also see "Big Pharma's Secret Weapon: Medicare Starts to Pay Off-Quietly" - Pink Sheet, 1 July, 2006..)

But what happens next year? Managed care plans offering Part D now have actual enrollment, and a handful of plans—led by UnitedHealth Group Inc. and Humana Inc. —control significant...

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