Medicare Part D "donut hole" boost for generics

The Medicare Part D prescription drug benefit has been the target of renewed criticism over the infamous "Donut hole," the gap in reimbursement coverage for drug spending between $2,400 and $5,451.25 in 2007. A report in the Los Angeles Times claims that Medicare insurance plans offering branded prescription drugs in the coverage gap have failed to keep costs down, forcing them to either discontinue their policies or switching to providing generic equivalents.

A spokesman for Sierra Health Services, Peter O'Neill, told the LA Times: "there are two plans that have had experience with providing [branded drug] coverage in the donut hole and neither of us got it correct." The other firm is Humana, which has discontinued its own branded-drug coverage in the $3,051 gap.

US House of Representatives member Pete Stark (Democrat, California), commented on the situation, claiming that "closing the donut hole would be expensive unless you did a whole host of other things such as having the government negotiate for the purchase of drugs. And the President would probably veto that."