A Windfall From Shifts to Medicare

By MILT FREUDENHEIM

The pharmaceutical industry is beginning to reap a windfall from a surprisingly lucrative niche market: drugs for poor people.

And analysts expect the benefits to show up in many of the quarterly financial results that drug makers will begin posting this week.

The windfall, which by some estimates could be $2 billion or more this year, is a result of the transfer of millions of low-income people into the new Medicare Part D drug program that went into effect in January. Under that program, as it turns out, the prices paid by insurers, and eventually the taxpayer, for the medications given to those transferred are likely to be higher than what was paid under the federal-state Medicaid programs for the poor.