Pharma's "gift" to the Medicare patient.

Perhaps you heard -- Pharma just got together with AARP to announce that they will offer a 50% discount on patent-protected brand name drugs for Medicare patients once the patient reaches the "doughnut hole" -- the point in annual spending ($2700) when Medicare takes a breather and the patient is responsible for 100% of his drug bill. (Later in the year, once the patient's total spending (out-of-pocket + Medicare-paid) reaches $6154, catastrophic coverage kicks in, and Medicare gets generous again). Though the details are sketchy, one account says that all the savings will go to the patient. That is, the full cost of the drug will count toward achieving the catastrophic limit, so the patient will get credit for the other half of the drug's price, too. The Medicare plan won't gain any savings. Sounds like a good deal for the patient, but not if it takes the pressure off drug companies to keep total prices down, and if it induces patients and their docs to order more brand name drugs. Then the cost of the drug plans will rise, and both the gov't (us) and Medicare enrollees will pay more in premiums. Also, how can the administration be considering using the savings to pay for health reform when there don't appear to be any savings to the program itself?

If, however, Pharma means that the patient's actual spending will be what counts toward the catastrophic limit, then the patient won't gain as much, and he won't gain anything if the total costs of his drug coverage take him to the catastrophic limit. He'll just get to the limit more slowly during the year.

So, it seems for now that everyone is being duped but the drug companies. Or is everyone (AARP, Prez Obama, drug industry) trying to take credit for something that's too byzantine for us to follow?