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5 ways health reform affects your medications

Consumer Reports News: July 02, 2012 11:08 AM

The U.S. Supreme Court's decision last week to uphold the Affordable Care Act is mostly good news for consumers who use and buy prescription drugs. Here's why.

1. Say bye-bye to the "doughnut" hole.
Health reform will eventually eliminate the "doughnut hole" entirely. People with Medicare Part D now have a $2,930 spending limit before they hit the doughnut hole. Once inside, you'll pay 50 percent of the cost of brand-name drugs and 86 percent of the cost of generics until you and Medicare together have spent $6,658. Things get better in 2013: Brand name drugs will run you 47.5 percent of the cost, and 79 percent for generics. The doughnut hole will continue to shrink year by year, until it disappears completely by 2020.

2. Some expensive drugs will eventually be available as generics.
Specifically, drugs called biologics—they are mostly made from human or animal material—did not have a clear way to become available as generics before health reform. Now, they do. That's good news, because those drugs includes a number of important medications including vaccines and gene therapies. Here's an example: One type of biologic drug is used to treat autoimmune disorders, such as rheumatoid arthritis, inflammatory bowel disease, and psoriasis. Those drugs can be pricey, with some running as high as $2,600 per month or more. Right now, there are no generic versions available for these medications. While there's still much to be worked out in terms of when and how a generic biologic drug is made available, you should eventually be able to pay less than for its brand-name counterpart.

3. Better research on which drugs work best.
Health reform also calls for millions of dollars to fund studies that directly compare drugs against each other, instead of just a placebo or an inactive ingredient. Why does that matter? With that information in hand—based on science, not on a hunch or a drug-company's advertising—you and your doctor can decide the best treatment for you. The funding is in addition to $1.1 billion in funding from an earlier stimulus package. It also created an official institute to conduct the studies. (Note: We initially identified this as an official "government" institute, which, although it is funded by the government, it is actually an independent group.)

4. Companies will be required to report payments and gifts to doctors.
Beginning in 2013, drug, device and medical supply companies will have to report gifts, payments, meals, travel, or other fees that they pay to a doctor or teaching hospital. While they must report it to the government, companies can delay reporting to the public if it finds that doing so will hurt their business. While we think such payments should be banned all together, that is a huge step forward.

5. New limits on Flexible Spending Arrangements (FSAs).
Starting Jan. 1, 2013, you will only be able to contribute no more than $2,500 to your account. For people with plans that run on a fiscal (rather than calendar) year, the cap takes effect July 1, 2013. And, already in effect, you can no longer use FSA funds to pay for over-the-counter drugs, unless your doctor specifically prescribes them.


Closing the Coverage Gap-- Medicare Prescription Drugs Are Becoming More Affordable [ Centers for Medicaid and Medicare Services ]

Food and Drug Administration Information for Consumers (Biosimilars) [ Food and Drug Administration ]

Patient-Centered Outcomes Research Institute [ PCORI ]

Information on Implementation of the Physician Payments Sunshine Act [ Centers for Medicaid and Medicare Services ]

Lisa Gill

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