Drug Companies Fail to Get Congress to Remove Change that Closes Medicare Drug Plan “Donut Hole” in 2019

Drug companies failed to get Congress to reduce a change in the Medicare drug plan that requires them to pay 70% of drug costs for seniors in the Medicare donut hole in 2019.  They currently pay 50%  but Congress moved to close the coverage gap a year earlier than in current law and raised the drug companies share of the costs in order to pay for the change.   AARP and other senior organizations had lobbied against the drug companies and thwarted them from defeating the change which was in the major appropriations bill passed to fund the government for the rest of the fiscal year.

The donut hole is a coverage gap in the Medicare Part D drug plan.  After reaching a certain level of annual drug costs, $3750 in 2018, beneficiaries have to pay most of the cost of drugs in the gap until they reach $5000 in costs and then receive catastrophic coverage and only pay 5% of drug costs for the remainder of the year.   The Affordable Care Act (ACA) included provisions to gradually reduce and eliminate the donut hole by 2020.   Congress had recently included changes to eliminate the coverage gap in 2019 and the pharmaceutical lobby had launched a vigorous effort to defeat the change.

This was a rare defeat for the drug company lobby which has made extensive campaign contributions to members of Congress and gained the support and allegiance of some powerful members of Congress.