REP. STARK APPLAUDS COURT ACTION TO PROTECT CONSUMERS' INTERESTS BY HALTING IMPLEMENTATION OF THE PRESIDENT'S DRUG DISCOUNT CARD

September 7, 2001

Washington, D.C. - Rep. Pete Stark lauded U.S. District Court Judge Paul Friedman’s injunction to block implementation of the President’s plan to offer prescription drug discount cards to Medicare beneficiaries.

Rep. Stark had joined the lawsuit by filing an amicus brief with the court August 7th because of concerns that the plan was devised to delay Congressional action on a Medicare prescription drug benefit rather than meet the needs of seniors. Specifically, he raised concerns similar to those of the plaintiffs that the plan had been devised outside of the public eye in conjunction with the pharmaceutical industry, and that the Administration had failed to follow federal law in developing the program.

“The Court has affirmed what we’ve been saying for months – that the Bush Administration acted without authority in its attempt to implement a Medicare prescription drug discount card program. The fact that the judge ruled immediately to block the program highlights that the Bush Administration simply doesn’t understand the rules of government. They make up rules for governing just like they cook budget numbers to meet their needs,” said Rep. Stark.

“This decision is a real victory for consumers. Now, if the program is to go forward, the Administration will be forced to work with Congress and with beneficiary representatives. Then the Administration will finally hear the message they should have understood before they started this sham process: America’s seniors don’t want a Medicare-endorsed discount card. Such cards are readily available today and fail to meet their prescription drug needs. What America’s seniors want –and need – is a Medicare prescription drug benefit that provides coverage for their prescription drug costs,” Rep. Stark said.

In a related matter, Reps. Stark, Waxman, Dingell, Rangel, Brown, and Ross yesterday requested an investigation by the General Accounting Office into the existing drug discount card programs to discover what level of discounts those cards typically provide, whether they provide the level of discounts advertised, and to analyze state action to regulate these companies because of consumer protection concerns. A copy of the letter to GAO follows.

CONTACT: Brian Mason (202) 225-5065

September 6, 2001

Mr. David M. Walker
Comptroller General
U.S. General Accounting Office
441 G Street, NW
Washington, D.C. 20548

Dear Mr. Walker:

Earlier this year, President Bush announced the establishment of a Medicare-endorsed prescription drug discount card program. The President's plan appears to be based on similar programs currently offered by private companies and pharmacy benefit managers.

Based on our analysis of prescription drug cards, we are concerned that many prescription drug discount cards fail to provide any significant help to senior citizens. As Members on House Committees with primary jurisdiction over federal health policy, we have an interest in understanding how current prescription drug discount cards function, given that they will serve as a model for a federally endorsed program. Specifically, we would like GAO to address and report on the following questions:

1. What level of discount do prescription drug cards currently offer seniors?
2. Do the actual level of discounts match the advertised discounts?
3. How do these discounts compare to drug prices currently available to seniors 1through on-line pharmacies or mail order?
4. Do the plans provide discounts on all drugs or are the discounts only on certain drugs?
5. Are seniors more likely to use mail order pharmacies once they have signed up for the drug cards?
6. Do any of these cards require that an enrollee participate in only their drug discount card program?
7. What procedures are in place to ensure that these cards deliver the promised discounts?
8. Which states, if any, have limited advertising for these cards and why?
9. Are drug manufacturer discounts responsible for the discounts the seniors receive or do the discounts come primarily at the expense of the pharmacies?

We thank you in advance for your attention to this request. Please call Karen Lightfoot at (202) 225-5051 or David Nelson at (202) 226-3400 if you have any questions regarding this request.

Sincerely,

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