MEDICARE Discount cards to reduce drug bill

Pricing information is to be posted on the Medicare Web site.
WASHINGTON (AP) -- Discount cards that older Americans can purchase to save modest amounts on prescription drugs will be the first tangible result that people will see, perhaps as early as April 1, from the Medicare bill Congress approved this week.
The Bush administration says the cards can cut out-of-pocket drug expenses by 15 percent to 25 percent because sponsors will use enrollees' purchasing power to negotiate discounts with drug makers and pharmacies.
For low-income people without drug coverage, the cards would function as prescription drug debit cards, with the government providing $600 a year to defray drug expenses.
The cards can be issued by insurance companies, wholesale and retail pharmacies and pharmacy benefit managers that now administer drug insurance programs for companies and the government.
Under the bill that President Bush is expected to sign, the cards would be phased out in 2006 when a new prescription drug benefit would begin.
Criticism
Critics said the legislation offers little, if any, improvement over current discount cards and would not guarantee a level of savings or prevent rising drug prices from negating the discount.
"It's better than nothing, but barely," said Rep. Sherrod Brown of Ohio, the senior Democrat on the House Energy and Commerce Committee's health panel.
"Because Republicans have done nothing about drug prices, the discount card doesn't even compensate for inflation."
Unlike discount cards now available, this program would allow a Medicare client to sign up for just one card, which would give those offering the cards more leverage in negotiating deals. Participants would pay up to $30 a year to join.
Tom Scully, administrator of the federal agency that runs the Medicare program, said the companies that issue the cards "can go back to Merck and say, 'We have 15 million people."'
But the cards are likely to offer different discounts for different drugs made by different companies. Participants will have to choose a card based on which one meshes best with their prescriptions.
How this will work
Scully said pricing information will be posted and updated on the Medicare Web site and also will be available from the Medicare help line, 1-800-Medicare. "You can look at the Web site and see who has the best prices for drugs you take," he said.
Prices and prescriptions may change, but the bill says participants can opt for a different card only during the annual enrollment period or under exceptional circumstances, such as a long-distance move.
Bush has called the cards a first step to helping older Americans with their soaring drug costs. His administration has been trying to get Medicare-approved cards in people's hands since 2001 but has been stymied by a federal court ruling in a lawsuit filed by pharmacists challenging the administration's authority to put the program in place.
A recent study by the congressional General Accounting Office found that, for several popular brand-name drugs, current discount cards offered cheaper prices than those found at retail pharmacies in Washington, D.C. The capital had the highest retail pharmacy prices of three areas in the GAO study.
The savings ranged from 2 percent for the heartburn and ulcer drug Prilosec to 10 percent on the cholesterol-reducing Lipitor, and 19 percent on the blood pressure pill Norvasc.
Savings on lower-priced generic drugs were considerably higher, as much as 44 percent for the blood-pressure drug Furosemide.
The prescription drug benefit that begins in 2006 dwarfs the discount card program. But John Rother, AARP's public policy director, said the discount program will serve as a test run of the government's ability to enroll low-income older people who qualify for subsidies.
Government assistance "doesn't do any good if people don't sign up for it," Rother said.