Benefits of Medicare drug discount cards debated

Published 9:00 pm Wednesday, November 26, 2003

WASHINGTON — 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 reduce 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.

Critics said the legislation offers little, if any, improvement over existing 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.

Scully said pricing information will be posted and updated on the Medicare Web site — www.medicare.gov — and also will be available from the Medicare help line, 800-633-4227. "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.

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