Market forces have helped lower prescription drug prices and will reduce the number of plans offered under the Medicare prescription drug benefit next year, HHS Secretary Mike Leavitt told insurance executives on Tuesday at a meeting sponsored by America's Health Insurance Plans, CQ HealthBeat reports. "The market has very clearly driven the prices down," Leavitt said, adding, "We believe that the market will also simplify this program." Calling the initial version of the drug benefit "Medicare Part D 1.0," Leavitt told executives that "Part D 2.0" would reflect the "need for simplification and standardization" in the program. CMS Administrator Mark McClellan said that "some plans are definitely proving to be more popular than others" and that there is "some consolidation." He added, "I suspect we are going to see some more of that, particularly from plans that haven't generated a large level of enrollment." However, CMS might "not be leaving it entirely up to market forces to reduce plan offerings," CQ HealthBeat reports (Reichard, CQ HealthBeat, 3/7). In late February, CMS sent a memo to insurers requesting feedback on a proposal to limit insurers with Medicare drug plans to offering one "basic" benefit plan and one "enhanced" benefit plan in each region. For this year's coverage, insurers were allowed to sponsor up to three plans per region (Kaiser Daily Health Policy Report, 2/27). In the meeting Tuesday, Leavitt cited elimination of "separate applications ... for every plan" as an example of the program's future simplification.

Customer Service
Leavitt said that drug plans' customer service is improving but has "a ways to go yet." He said he is concerned about the number of beneficiaries who have yet to receive a plan number. He added that "plans need to do a better job of responding to inquires by beneficiaries and pharmacists" and that plans need to pay pharmacists faster, particularly those in rural areas. He added, "I am also concerned that there are too many people who are getting answering machines during business hours asking them to call back at a different time." Leavitt and McClellan said CMS is increasing monitoring of plans' call centers and their speed at processing enrollment applications. CMS is designing performance measures to track those functions and will release the data to the public, McClellan said. (CQ HealthBeat, 3/7).

A webcast of the AHIP conference is available online at kaisernetwork.org.

McClellan Interview
Separately, in an interview with the Associated Press, McClellan said "at this point" he opposes proposals to extend the May 15 deadline for enrolling in the drug benefit. "Many people tend to wait until close to the deadline to make a decision," he said. McClellan also reiterated that there likely will be a decreased number of plans being offered. He said the decrease will be "dictated by the market, [and] by what consumers want," he but added, "Nobody should be looking in detail through 40 different choices, so the question is, how can you quickly help people go from 40 to the four or five most useful to them" (Freking, AP/Long Island Newsday, 3/8).

Savings Examined
In related news, the San Francisco Chronicle on Wednesday examined the debate over whether the drug benefit "is offering genuine discounts for medication." Three studies released in the last week draw differing conclusions about how much beneficiaries can save under the drug benefit, the Chronicle reports. One study, released by Rep. Pete Stark (D-Calif.) and other Democrats in California's congressional delegation, found that prices for 10 commonly prescribed drugs under the drug benefit are higher than Canadian drug prices and prices at the retailer Costco. A second study, by Consumers Union, found that beneficiaries enrolled in the drug benefit could save between $2,300 and $5,000 annually by switching from brand-name drugs to generics or other lower-cost alternatives. In addition, a CMS study found that beneficiaries saved an average of 57% compared with medication costs without drug coverage. Gail Shearer, director of Consumer Reports Best Buy Drugs, which prepared the CU study, said, "The one fairly consistent message Medicare beneficiaries should be getting is that it probably makes sense for them to sign up for a plan," although she added that the drug benefit is "far from ideal" (Colliver, San Francisco Chronicle, 3/8).