Medicare drug costs rise significantly, report finds

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The prices for the most prescribed brand-name medications under Medicare private insurance plans increased at more than twice the rate of the wholesale market. This difference could help revive legislation giving the government negotiating power over Medicare drug prices.

The prices for 10 of the most prescribed brand-name medications jumped an average of 6.8% since December under Medicare private insurance plans. Wholesale prices for the same drugs rose just 3%, according to a new report from House Oversight and Government Reform investigators.

Most seniors will not feel the impact of these cost increases until they hit the so-called "doughnut hole" coverage gap, according to an analysis of the report. Drug manufacturers and health insurers contested the data, alleging that a push towards generic drugs has held down overall costs. But the cost increases of brand-name costs will overwhelm the savings from generics, analysts said.