Medicare Drug Discount Saves Elderly $8.9 Billion

The Obama administration said the U.S. health-care overhaul has saved Medicare recipients $8.9 billion so far in prescription drug costs.

The savings average out to $1,209 a person, the Centers for Medicare and Medicaid Services said today in a statement. The savings are related to a discount program on medicines created by the Patient Protection and Affordable Care Act of 2010.

The discounts apply to recipients of Medicare, the U.S. health program for the elderly and disabled, who reach a coverage gap in the program’s prescription medicine plans called the “donut hole.” The law requires drugmakers to provide a discount to people in the gap until they spend so much in a year, after which the government covers almost all the medicine costs.

Drug companies agreed to the discounts as part of an $80 billion contribution toward the cost of the measure. The savings this year through October amount to about $866 a person on average, CMS said.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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