Government

Medicare relief coming soon with drug discount cards

Doctors support the effort but worry about the formularies.

By Markian Hawryluk — Posted March 8, 2004

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Washington -- The outpatient prescription drug benefit established by last year's Medicare reform bill does not kick in until 2006, but seniors could see the initial impact of the effort to make medications more affordable this spring.

The Centers for Medicare & Medicaid Services announced in February that 106 organizations had applied to offer drug discount cards to Medicare beneficiaries. The agency expects to announce its endorsed drug card sponsors in April, and beneficiaries will be able to enroll in the card programs by early May.

"This is an enthusiastic response by companies to sponsor money-saving drug discount cards for Medicare beneficiaries," said Health and Human Services Secretary Tommy Thompson. "These cards will provide beneficiaries the confidence of a Medicare-approved product, and the savings will be especially important for low-income seniors and people with disabilities."

Beneficiaries will be able to sign up with only one of the Medicare-endorsed discount cards and can expect discounts of 10% to 25% off retail prices, CMS said.

The American Medical Association expressed support for discount drug cards but remained concerned about whether the cards would have restrictive formularies. The cards must offer discounts for at least one product in each therapeutic category set out by CMS. In a letter to the agency, AMA Executive Vice President Michael Maves, MD, warned that some sponsors could use that minimum standard as a ceiling.

"Drug formularies that are too restrictive can have negative consequences on enrollees' health," he wrote. "There may be subsets of patients who do not respond optimally to a formulary drug or for whom a formulary drug is contraindicated."

Such patients should have access to the most appropriate drug at a discounted price, he said.

The discount card program includes special breaks for low-income patients. Medicare beneficiaries with incomes under $12,569, or $16,862 for couples, will not have to pay any enrollment fee and will get an immediate $600 credit on their card to purchase prescription drugs. Some cards also might waive the enrollment fee for higher-income individuals.

About half of the applicants want to offer cards to fee-for-service Medicare beneficiaries, and about half of those would create national cards. The other half of applicants would offer cards only to enrollees of Medicare managed care plans.

Applications were submitted by a number of large pharmacy benefit managers, as well as trade organizations, including the National Assn. of Chain Drug Stores.

Critics of the drug discount cards maintain that the discounts are unlikely to materialize and that the large number of drug card options will confuse seniors. Robert Hayes, president of the Medicare Rights Center, said the Medicare-endorsed cards could offer no more savings than the discount cards beneficiaries already have.

"If your income is low, you are likely better off taking advantage of the low-income discount drug card's $600 credit toward medications and then switching to a pharmaceutical company discount card," he said. "And if your income is above $12,569, you may be better off with the discount card you are currently using, getting your drugs from the [Dept. of Veterans Affairs] if you qualify, or buying them from Canada."

Some pharmaceutical manufacturers already offer their own cards to low-income individuals. Seven manufacturers also have teamed up to offer the Together Rx card, which offers discounts on more than 170 prescription medications.

These cards are not part of the Medicare-sanctioned card program and use different income criteria to determine eligibility. Discounts on cards are limited to the manufacturers' products. Several firms have indicated that they will continue offering their discount cards even after the Medicare cards become available.

CMS plans to provide detailed information on all of the Medicare-endorsed drug card options on its Web site. (link).

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External links

Medicare Rights Center information on the Medicare drug discount card program (link)

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