[Chicago, IL] – On the day that an average Medicare beneficiary enrolled in Part D will fall into the “doughnut hole,” U.S. Senator Dick Durbin (D-IL) today called on Congress to pass his legislation to close the coverage gap, while lowering the price of prescription drugs for seniors.

Durbin pointed to a report released by the Democratic staff of the House Ways and Means Committee which found that 96% of Illinois Medicare beneficiaries are enrolled in a private prescription drug plan with a coverage gap or “doughnut hole.” Beneficiaries whose annual drug costs are between $2,250 and $5,100 fall into their plan’s “doughnut hole” and are forced to pay the full price for their medications.

“Seniors are starting to pay the full price for a drug plan designed by and for the pharmaceutical industry,” Durbin said. “More than 430,000 Illinoisans could be one prescription away from falling into the doughnut hole. Until we change the law to give Medicare the authority to negotiate on behalf of its beneficiaries, the current drug plan will continue to be a financial boon to pharmaceutical companies and a bad deal for seniors.”

A study released in February, 2006 by the Institute for America’s Future concluded that the combined savings from having Medicare negotiate prices directly with the pharmaceutical industry and from having Medicare directly offer a prescription drug benefit rather than rely on private insurers would be more than $600 billion over the next seven years.

Durbin introduced the Medicare Prescription Drugs Savings Act to reverse a provision in the Medicare prescription drug bill which prohibits the Secretary of Health and Human Services from negotiating with drug companies for lower prices. The bill instructs the Secretary of Health and Human Services to offer a nationwide Medicare-delivered prescription drug benefit and to negotiate group purchasing agreements on behalf of beneficiaries who choose to receive their drugs through the Medicare-administered benefit. Savings obtained from direct negotiations with drug companies would be used to close the coverage gap.

Durbin noted that there are 130 different private plans in Illinois and said that seniors in his state and across the country are being shortchanged because Medicare was prohibited in the 2003 law from using its buying power to negotiate for lower drug prices.

“The Veterans Administration has a process for negotiating drug prices that is proven and effective and leverages the buying power of millions of veterans. Medicare has 25 times the number of people in its system than the Veterans Administration. My bill is good old-fashioned free market economics: if one buys in bulk, the price will come down. Seniors will enjoy the savings and will see their doughnut hole shrink,” Durbin concluded.