Medicare plan boosts statins, ulcer drugs: report

By Kim Dixon

CHICAGO (Reuters) - New prescription drug coverage in the federal Medicare insurance plan for the elderly drove a boost in use of pricey brand-name drugs such as statins and ulcer medications, an analysis released on Tuesday said.

Medicare, available to 43 million elderly and disabled Americans, began to pay for prescription drugs in 2006, the biggest shift in its four-decade history. As a result, more than half of the Medicare population now gets drug coverage through a private plan run by companies such as Humana Inc. or UnitedHealth Group.

The so-called Medicare Part D program boosted sales of cholesterol-lowering statins by 7 percent, and ulcer- and heartburn-treating proton pump inhibitors by 5 percent, the report by pharmaceutical industry consultancy IMS Health said.

These first few years of Medicare Part D will be "golden years for enrollees and branded pharmaceutical companies alike," the report said.

Drugmakers strongly backed the 2003 law creating the drug program and are turning out to be, as expected, big financial winners. Private health insurers that largely run the plans were supposed to keep a lid on costs, but spent the first year focusing on enrolling patients, one report author said.

"The first year was about enrollment. To be very blunt, the second year will be about making money," for the plans, Michel Denarie, senior principal at IMS said.

The report forecast "bumps in the road," for both enrollees and drugmakers going forward, as insurers clamp down on brand-drug usage and force more costs onto patients.

About 486 million prescriptions, or 15 percent of all retail prescriptions filled in 2006, came from Part D beneficiaries. These were not all new prescriptions, however, because a sizable amount of people had another form of health insurance the year earlier.