Mega Prescription Costs Pushing More People Into Medicare’s “Doughnut Hole”

Mega Prescription Costs Pushing More People Into Medicare’s “Doughnut Hole”

Alexandria, VA: Steep prescription drug prices may be pushing more Medicare beneficiaries into the Medicare coverage gap known as the prescription drug coverage “doughnut hole,” warns The Senior Citizens League (TSCL). Extreme drug cost increases, that in the past were more commonly associated with brand or specialty drugs, are now affecting many generics as well. That’s taking people with Medicare by surprise as they struggle to cope with the toll that higher costs are taking on their incomes.

Millicent Graves of Williamsburg, Virginia, recently was shocked to discover an astounding price range in different forms of the same generic drug. After a worsening of her psoriasis, her doctor prescribed an aerosol foam version of Clobetasol propionate, a common generic often used to treat psoriasis. When she filled her prescription in December of 2014 for the Clobetasol solution, she paid $35 — the full retail cost. But when filling the first prescription for Clobetasol foam in 2015, Graves discovered the retail cost was $475.88. Five weeks later when she refilled her prescription for the foam, the cost had jumped— to $627, making the total difference in price between the solution and foam 1,691%. “When I looked at the receipt I almost passed out,” she says. “Everything is the same as the first bottle! Where is that money going? I think the government needs to investigate,” she says.

The foam version of the drug has been more effective in clearing most of Graves’ symptoms, and her Medicare Part D prescription plan has paid for most of the cost so far. With her most recent refill, the full retail cost of the drug has gone back down to $475.88. But Graves is keeping use of the medicine to a minimum, not only for health reasons, but also because she doesn’t want to run through her Part D initial coverage limit and hit the doughnut hole.

Medicare’s Part D initial coverage limit is $2,960 this year. “It’s important that consumers understand that this includes what both the beneficiary and the drug plan must pay, ” explains TSCL’s Chairman Ed Cates. “Even if your copay is relatively low, like $5.00 for a generic drug, it’s the full retail amount of the drug, the $475 - $627 in this case, that’s counted toward the coverage limit,” Cates says. “At these prices Medicare patients could wind up hitting the doughnut hole after only a few refills,” he observes.

Once in the doughnut hole, beneficiaries are on the hook for a much higher share of the cost—65% of the cost of generic drugs, or 45% of the cost of brand name drugs. Medicare beneficiaries must spend a total of $4,700 out of pocket in drug costs for the year, before catastrophic coverage kicks in. And only the amount that beneficiaries pay out of pocket counts toward the $4,700 limit — not the full retail cost.

Clobetasol propionate is one of four medications that accounted for the most significant generic price increases in 2014, according to materials on the website of pharmacy benefit manager Express Scripts.[i] The steep climb in generic drugs prompted a Senate hearing last year. The prices of more than 1,200 generic medications increased an average of 448 percent between July 2013 and July 2014.

Graves can’t understand why the pricing is going unchecked by the federal government. “People who don’t have good Part D coverage or the money to pay for their drugs would be forced to go without,” she protests. “It’s GREED, GREED, GREED!”

TSCL agrees, and believes that the extreme cost increases are putting Medicare beneficiaries and funding for the Part D “Extra Help” program at risk. “The public is entitled to know why our government looks the other way as drug companies impose extreme costs,” says Cates. TSCL supports legislation that would give Medicare the authority to negotiate pharmaceutical prices for covered Part D drugs, and would require greater pricing transparency from manufacturers. Are extreme drug costs affecting you? TSCL wants to hear from you. Visit


With about 1 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of TREA The Enlisted Association. Please visit or call 1-800-333-8725 for more information.


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[i] “The Reality Behind Generic Drug Inflation,” Express Scripts, December 30, 2014,