Bush Administration Selects Medicare Prescription Drug Discount Card Sponsors

The Bush administration has given approval to 28 private firms -- mostly large health insurers and pharmacy benefit managers -- to offer prescription drug discount cards to Medicare beneficiaries, officials announced Thursday, USA Today reports. The cards, intended as a temporary prescription drug assistance measure until the Medicare prescription drug benefit takes effect in 2006, are expected to offer seniors discounts of 10% to 25% on medications (Appleby, USA Today, 3/26). The 28 firms will offer a total of 49 different drug card programs, 30 of which will be available nationwide and 19 of which will be offered on a regional basis (HHS release, 3/25). Companies that have been approved to offer the discount cards include Aetna, WellPoint, Caremark Rx, Medco and Express Scripts (USA Today, 3/26). The Medicare-approved card United Healthcare will offer also was endorsed by AARP. HHS declined applications from 29 companies, most commonly because the potential sponsors could not demonstrate adequate financing, would not have offered discounts on enough medications or did not have contracts with enough pharmacies (Pear, New York Times, 3/26). HHS also announced 43 sponsors representing 84 Medicare Advantage plans will be eligible to offer drug discount cards to beneficiaries enrolled in their plans (HHS release, 3/25). Medicare Advantage plan members will be automatically enrolled in the drug discount card program if their plan offers one (Dalrymple, AP/Las Vegas Sun, 3/26).

The discount cards will be available to all beneficiaries who do not have prescription drug coverage through Medicaid. Companies offering the cards can charge an annual enrollment fee of up to $30 (HHS release, 3/25). About 25% of sponsors will not charge enrollment fees, according to Timothy Trysla, a Medicare official. The discounts will vary by card, and many drug card sponsors have established preferred-drug lists under which they will offer savings on at least one drug in each of 209 categories of medicines commonly used by Medicare beneficiaries. Roberta Milman, a vice president of AARP services, said United Healthcare's card will provide discounts on all FDA-approved drugs (New York Times, 3/26). HHS Secretary Tommy Thompson said that CMS would impose "strict monitoring" of card sponsors to prevent "bait-and-switch" operations under which sponsors change the drugs that are discounted after beneficiaries enroll (Kemper, Los Angeles Times, 3/26). Thompson said that savings generated by the cards will be "much closer to 25%" than 10% (New York Times, 3/26). The Pharmaceutical Care Management Association, a trade group for PBMs, predicted that savings on some drugs could be as high as 50% (Lueck, Wall Street Journal, 3/26). Under the discount program, beneficiaries with annual incomes less than $12,569 per year for individuals or $16,862 for couples will be eligible for a $600 annual subsidy for their prescription drug costs and will not have to pay any enrollment fees (HHS release, 3/25). The Social Security Administration plans to notify low-income beneficiaries who might be eligible for the subsidies (AP/Las Vegas Sun, 3/26). About 7.3 million beneficiaries are expected to apply for the cards. Enrollment will begin in May, and beneficiaries can begin using the cards in June.

Details and pricing information for the discount card programs will be available on the CMS Web site beginning next month or by calling 1-800-MEDICARE (Loyd, Philadelphia Inquirer, 3/26). HHS soon will launch a "major outreach program" to educate seniors on how the drug cards work and help them choose which card is best for them, according to the Washington Post (Kaufman, Washington Post, 3/26). The education campaign will include television, radio and print ads, a brochure to be mailed to beneficiaries and efforts to coordinate with state programs. In addition, beneficiaries will be able to use an "interactive tool" available on the CMS Web site or the toll-free Medicare hotline to list the medications they take and receive a comparison of cards according to drug prices, enrollment fees and participating pharmacies, the Los Angeles Times reports.

Thompson said that the discount card program represents "only the beginning of the benefits seniors are going to see from this wonderful bill. There has been so much misinformation. ... This is a very good law" (Kemper, Los Angeles Times, 3/26). Thompson also said that the drug discount card program could lower drug costs for all U.S. residents, because the advertised discounts might create competition that would "inevitably drive prices down," according to the Post (Washington Post, 3/26). Mark McClellan, the new CMS administrator, said, "My first priority as administrator is to use the new Medicare law to lower drug prices (New York Times, 3/26). Rep. Steve Buyer (R-Ind.), who wrote the Medicare law's drug discount card provision, "praised" the new program but said that "clearing up confusion among beneficiaries would pose a challenge," according to CongressDaily (Heil, CongressDaily, 3/26). But Sen. Edward Kennedy (D-Mass.) said, "The administration's discount cards are no substitute for a meaningful program to reduce the exorbitant prices American patients pay for prescription drugs," adding that price increases on many drugs "in just the last 12 months have already wiped out any savings that these cards may provide" (Los Angeles Times, 3/26). Senate Minority Leader Tom Daschle (D-S.D.) on Thursday introduced legislation that would require card sponsors to pass along to beneficiaries 90% of discounts they receive from pharmaceutical companies. He said, "The Bush administration is promising seniors discounts in order to convince them to pay private companies a $30 fee. My bill would ensure that these private companies pass the discounts along to those seniors" (CongressDaily, 3/26). A full list of companies that will offer the prescription drug discount cards is available online.

MPR's "Marketplace" Thursday reported on the Medicare prescription drug discount cards. The segment includes comments from Diane Archer, founder of the Medicare Rights Center; Ron Pollack, president of Families USA; and Thompson (Gardner, "Marketplace," MPR, 3/25). The complete segment is available online in RealPlayer. NPR's "Morning Edition" Friday also reported on the Medicare drug cards. The segment includes comments from Pollack and Thompson (Silberner, "Morning Edition," NPR, 3/26). The complete segment is available online in RealPlayer.