AMNews: Nov. 26, 2001. Medicare Rx plan being retooled ... American Medical News

Medicare Rx plan being retooled

While the government works on its program, at least one company is going ahead with its own drug card for prescription coverage.

By Tanya Albert, AMNews staff. Nov. 26, 2001. Additional information

The Centers for Medicare & Medicaid Services will have to publish information about a proposed drug discount card for seniors before any such plan can be implemented.

And a federal court says that plan is going to have to be different from the one the Bush administration pitched earlier this year.

U.S. District Court for the District of Columbia Judge Paul L. Friedman earlier this month stayed -- or temporarily suspended -- a lawsuit against the government so it could submit a revised version of a proposed drug discount card policy to the Federal Register for public comment.

Representatives of the groups who filed the suit say they are pleased with the ruling.

"The court in no way gave approval for a discount card," said John M. Rector Sr., vice president of government affairs and general counsel for National Community Pharmacists Assn. which sued the government over the proposed drug card plan along with the National Assn. of Chain Drug Stores.

The proposed prescription drug program was part of a larger announcement Bush made earlier this summer outlining what he wants to see as part of Medicare reform legislation. The Rx card was proposed as a way for senior citizens to get immediate breaks on soaring prescription drug prices while lawmakers work on other Medicare reforms.

But the NCPA and NCDS sued CMS Administrator Thomas Scully and Dept. of Health and Human Services Administrator Tommy Thompson in July. They said the program had been created illegally and this fall, the groups won a temporary injunction against the program.

Scully said he was pleased with the court decision, which clears the way for CMS to bring a yet-to-be determined plan to the public for comment.

"We believe a drug discount plan is a first step to provide needed help to seniors, but not a substitute for a drug benefit," Scully said.

"We will continue to work with Congress on the president's proposals for Medicare reform, including a prescription drug benefit," he added.

A CMS spokesman said it was unclear exactly what will be published in the Federal Register. But the programs likely will be the same concept presented earlier, with more detail.

"We're hopeful that it will be acceptable," the spokesman said.

Plaintiffs aren't as hopeful.

Members of NCPA and NACDS aren't as hopeful a similar plan will be acceptable to them or the court.

"In the request for the stay, they said they were going to do something different," Rector said. "We're anxiously awaiting to see if they publish anything and waiting to see what authority they cite that gives them the power to create it."

After the initial stay was issued, Judge Friedman wrote an opinion clarifying his first order, saying that the government would not be pursuing its original plan.

"As defendants have stated, 'HHS is effectively withdrawing the program announced in July and seeking the views of all interested parties on how to proceed from here,' " Friedman wrote. "Defendants further point out that 'there will be ample opportunity to revisit the legal issues that have been raised in the matter' if and when another policy is issued."

NCPA and NACDS will be able to go back to the court for an opinion after a new proposal is submitted.

The NCPA and NACDS originally were concerned that CMS and HHS didn't have the legislative authority to create Medicare Rx cards.

Under the Bush administration's original proposal, pharmacy benefit managers were to issue government-approved "Medicare Rx" cards. The managers then would use beneficiaries' combined purchasing power to negotiate discounts with manufacturers and pharmacies for savings. Five of the nation's largest pharmacy benefits managers had agreed to participate when the plan was announced.

The groups said the government had broken the law by secretly meeting with private firms to hash out the Rx card idea and that the program could financially hurt pharmacies.

The government denied those accusations and said it had the authority to provide information, counseling and assistance to Medicare patients through a health insurance advisory service program.

Other drug discounts

While the government works on its Medicare-approved cards, at least one firm is forging ahead with plans to offer a pharmacy discount card that would give low-income seniors a discount on prescription drugs.

Novartis Pharmaceuticals Corp. in November announced that it would launch a prescription drug card for those older than 65 with an annual income of less than 300% of the federal poverty level. The card will be free, and patients should see a 30% to 40% retail savings on Novartis prescription drugs, the company said.

Thompson called the card innovative. "Moving forward, it will be necessary for the administration, the Congress and the private sector to work together to formulate a more comprehensive solution to this challenging problem," he said.

But Rector fears discount drug cards could erode a doctor's power on decisions. "You are going to have patients soliciting drugs for the company they're signed up for. That drug may not be the best for that person based on their body's chemistry and other prescriptions they may be taking."

ADDITIONAL INFORMATION:

Case at a glance

National Assn. of Chain Drug Stores and National Community Pharmacists Assn. v. Tommy G. Thompson and Thomas A. Scully

Venue: U.S. District Court for the District of Columbia
At issue: Whether the Centers for Medicare & Medicaid Services can go ahead with plans to create a discount card program with drug manufacturers.
Potential impact: The government says the program would help seniors cut prescription drug costs while Congress works to overhaul the Medicare system. The NACDS and NCPA say if the program goes forward, physicians could lose more control over how they care for their patients.

GOVERNMENT & MEDICINE