Moeller: Why does Medicare allow price gouging of prescription drugs?

Journalist Philip Moeller, who writes widely on health and retirement, is here to provide the Medicare answers you need in “Ask Phil, the Medicare Maven.” Send your questions to Phil.

Photo courtesy of Creative Commons
Photo courtesy of Creative Commons

Janice: I am on only a couple of prescription medications with no significant medical issues. One of my drugs costs me only $37 out-of-pocket for a 90-day supply. However, my insurance company is charged more than $500 for this generic drug, and all of this cost is applied to my donut-hole coverage. Over the course of the year, this single drug will eat up nearly my entire insurance limit. In Canada, my annual cost for this same drug would be only about $800 a year — without insurance! Why is our government allowing this price gouging, which we as citizens ultimately pay for? Not to mention, it’s compromising our health by not being able to afford medication that clearly has been exorbitantly overpriced.

Phil Moeller: Your government is allowing this, because the pharmaceutical industry convinced enough legislators in 2003 to forbid Medicare from negotiating drug prices when Congress enacted the law creating Part D drug plans. It was a bad move then, and it is costing us even more now. As new generations of effective but very expensive drugs hit the market, Medicare has little choice but to pay up. A Congress that truly represented the American public would have addressed this problem. Our Congress has not. And while high drug prices will be an issue in the 2016 presidential campaign, it’s tough to see Congress dealing with it before the election.

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Philip Moeller

Philip Moeller is a research fellow at the Center on Aging & Work at Boston College and co-author of “How to Live to 100.”

He wrote his latest book, “How to Get What’s Yours: The Secrets to Maxing Out Your Social Security,” with Making Sen$e’s Paul Solman and Larry Kotlikoff. He is now working on a companion book about Medicare.

Follow him on Twitter @PhilMoeller or e-mail him at

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