AMNews: July 30, 2001. Bush proposes prescription discount cards for seniors ... American Medical News

Bush proposes prescription discount cards for seniors

The president says the program would give Medicare beneficiaries some help paying for drugs while Congress works on a more comprehensive plan.

By Gina Shaw, AMNews correspondent. July 30, 2001. Additional information

Washington -- Seniors could get substantial prescription drug discounts under a new Medicare-endorsed prescription drug discount card program recently unveiled by President Bush.

The government would approve "Medicare Rx" cards, issued by pharmacy benefit managers, who would use the combined purchasing power of Medicare beneficiaries to negotiate discounts with manufacturers and pharmacies.

Five of the nation's largest pharmacy benefits managers have agreed to participate in the plan, which will be coordinated by the Centers for Medicare & Medicaid Services. Those companies are AdvancePCS, Scottsdale, Ariz.; Express Scripts Inc., St. Louis; Caremark Rx Inc., Birmingham, Ala.; Merck-Medco, Franklin Lakes, N.J.; and WellPoint Health Networks Inc., Thousand Oaks, Calif.

This is Bush's second Medicare outpatient prescription drug proposal. The first recommended grants to states to allow them to offer drug programs to beneficiaries. It, too, was billed as an intermediate step that would give beneficiaries some relief while Congress struggled with overall Medicare reform, but the plan failed to gain support in Congress.

The AMA welcomed Bush's new plan, calling it a "positive first step toward improving the program for America's seniors."

"We are especially pleased that the Medicare discount card will bring tangible improvements to seniors quickly. While overall Medicare reform will take time, this card will help seniors get relief now," said AMA President Richard F. Corlin, MD. "Although the Medicare program is among the nation's largest pool of patients, Medicare beneficiaries have not had the benefit of that market clout in buying prescription drugs."

That clout, suggested PBM representatives, could yield seniors discounts ranging on average from 15% to 25%. For generic prescriptions filled by mail, they said, discounts might go as high as 40%.

"The buying power of 14 million or 15 million seniors together under this umbrella will allow us to leverage relationships with pharmaceutical companies and with retail," said Dick Clark, CEO of Merck-Medco.

Beginning Nov. 1, seniors could pay a one-time enrollment fee to sign up with a Medicare Rx discount program and receive a card, according to the plan. Enrollment fees would be capped at $25, and at least some PBMs have said they plan to offer the card with no enrollment fee. Once enrolled with a particular discount plan, participants could switch plans only once every six months.

Discounts would start Jan. 1, 2002. Participating PBMs would be required to publish comparative information on their discounts and other benefits offered to cardholders.

Although CMS would promote the plan and coordinate enrollment through its 1-800-MEDICARE number, administration officials said it would not be a new federal program.

"It's like a 'Medicare seal of approval,' " said one official. Health and Human Services Secretary Tommy Thompson said the plan could move forward immediately because it did not require congressional approval.

Democrats in Congress were skeptical. Some said a variety of pharmacy discount cards already were available to seniors but they had not eased the burden of prescription drug costs.

Mixed reviews

"The average Medicare beneficiary spends $1,700 on prescription drugs," said Sen. Bob Graham (D, Fla.). "A savings of $170 a year still leaves staggering bills. My fear is that this discount-card plan will be used to delay action on a real, comprehensive prescription-drug plan that will make a real difference in the lives of America's seniors."

Former HCFA Administrator Bruce Vladeck, PhD, also was critical of Bush's proposal. "It doesn't do anything to help the people with the greatest need," he said.

Card issuers may be able to claim a reduction of as much as one-third off list price on certain drugs, said Dr. Vladeck, but he called it "inconceivable" that Medicare Rx could reduce the out-of-pocket costs to cardholders that significantly.

"There's not enough market power and not enough control in this fragmented an approach to discounts -- not if there are at least five different card issuers," said Dr. Vladeck, a health policy professor at Mount Sinai School of Medicine in New York.

But another former HCFA administrator, Gail Wilensky, PhD, warned against either dismissing or overstating the benefits of the president's approach.

"I think it will indeed be a help to seniors, particularly the one-third who do not have any sort of coverage for prescription drugs," she said. "The real advantage to this is the administration can do it now. But it's important that we don't make this what it's not. It's not a replacement for prescription-drug coverage and it's not Medicare reform, both of which we need."

Physicians should expect to hear much more about the Medicare Rx plan in the coming months, as CMS ramps up a $35 million marketing campaign that will promote the program. "You'll have to live in a very dark cave to miss our ad campaign this fall," said one administration official.

ADDITIONAL INFORMATION:

Reform framework

In addition to the prescription drug proposal, President Bush laid out the following broad principles he would like to see in overall Medicare reform legislation:

Improved coverage for preventive care and serious illnesses.
Preservation of the traditional fee-for-service Medicare option.
Improved Medicare health insurance options.
Strengthened long-term financial security for the program.
Improved government management of Medicare.
Updated and streamlined regulations and administrative procedures.
Encouragement of high-quality care.

Weblink

President Bush's Medicare plan (http://www.whitehouse.gov/news/releases/2001/07/20010712-3.html)

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