According to the Congressional Budget Office (CBO), the cost of Medicare Part D over 10 years will be $265 billion less than estimated last August. (Source)
The Medicare prescription drug benefit will cost $38 billion this year and $675 billion from 2007 through 2016. CBO director Peter Orszag (pictured) said the lowered cost estimate is attributed to the “lower-than-expected bids” of prescription drug plans.
“The bids are coming in, and the pricing is coming in better than anticipated, and that is likely a reflection of the competition that’s occurring in the private market,” he said.
In light of this news, I wonder what effect government drug price negotiations will have on competition in the private market and whether the Part D cost estimate will increase? (See House Approves Medicare Drug Negotiation Bill)
Other source: Orszag’s January 30 testimony
