Canadian Drug Sales Decline Since Start of Medicare Drug Benefit
Sales of prescription drugs from Canadian pharmacies to U.S. residents have declined as much as 30% since the Medicare prescription drug benefit took effect on Jan. 1, according to the Canadian International Pharmacy Association, the AP/Detroit News reports. There also has been a decline in purchases on state Web sites that assist residents in ordering prescription drugs from abroad, according to the AP/News.
Andy Troszok, president of CIPA, said the decline in sales is because of the start of the drug benefit and increased U.S. government seizures of prescription drugs ordered from Canada by U.S. residents (Lohn, AP/Detroit News, 2/22).
Canadian pharmacies say the U.S. government recently has increased the seizures, and some Canadian pharmacy officials have said they believe the latest seizures were meant to coincide with the Jan. 1 launch of the Medicare prescription drug benefit (California Healthline, 2/16).
Suzanne Trevino, a U.S. Customs and Border Protection spokesperson, said data on the number of seizures is not available.
Stephen Schondelmeyer, director of the Pharmaceutical Research & Management in Economics Institute at the University of Minnesota, said, "Seniors aren't the only ones who use drugs from Canada," adding, "For the people who don't have insurance somewhere else, Canada is still a very viable alternative" (AP/Detroit News, 2/22).
In other drug benefit news, a study from Democrats on the House Government Reform Committee finds that Medicare drug plan prices for the 10 most commonly prescribed medications for seniors have increased an average of 4.3% since the drug benefit began, the Atlanta Journal-Constitution reports (Lipman, Atlanta Journal-Constitution, 2/22).
The study, which was prepared for ranking committee member Rep. Henry Waxman (D-Calif.), examines drug prices under 10 Medicare drug plans (Reichard, CQ HealthBeat, 2/21). By comparison, the study finds that the average wholesale price for the drugs examined increased 3.4%, with an average increase of 0.3% when purchased from online retailer Drugstore.com and an increase of 2.4% when purchased from Canadian pharmacies (Atlanta Journal-Constitution, 2/22).
According to the study, the findings increase concern that drug plan sponsors used "bait-and-switch" tactics to attract beneficiaries to their plans by announcing low drug prices in 2005 and increasing drug prices once the drug benefit began in January, CQ HealthBeat reports (Reichard, CQ HealthBeat, 2/21). Plans that advertised the lowest prices in December 2005 had the largest price increases after the drug benefit began, according to the study (Atlanta Journal-Constitution, 2/22).
For example, the study finds that drug prices under the Caremark's Silverscript Plus Plan, which has the lowest overall prices in December 2005, increased an average of 10.2%. House Government Reform Committee Democrats also released other studies finding that prices charged by Medicare drug plans were higher than those offered through the Medicare drug discount card program in the months before the start of the drug benefit.
In addition, the studies find that the drug discount card sponsors were able to negotiate discounts of 3% to 5% (Reichard, CQ HealthBeat, 2/21).
Peter Ashkenaz, a spokesperson for CMS, said it is typical for drug prices to increase at the beginning of the year, "so the increases in January 2006 doesn't reflect any response to the Medicare coverage" (Atlanta Journal-Constitution, 2/22).
Mark Merritt, president of the Pharmaceutical Care Management Association, said, "Regrettably, this new study ignores two fundamental cost-savings options available to Medicare beneficiaries: mail-service pharmacies and generic drugs" (Reichard, CQ HealthBeat, 2/21).
Waxman said in a statement, "These findings confirm what seniors are discovering: Drug prices under the new Medicare drug plans are too high, and they are rising too fast" (Atlanta Journal-Constitution, 2/22).
The studies are available online.
Sen. Edward Kennedy (D-Mass.) on Tuesday said he plans to introduce legislation next week that would create a drug plan offered directly through Medicare with a standard nationwide premium, CQ HealthBeat reports.
In addition, the legislation would eliminate the so-called "doughnut hole" -- the coverage gap under which beneficiaries are responsible for annual drug costs between $2,250 and $5,100 -- and authorize Medicare to negotiate drug prices with pharmaceutical companies, according to CQ HealthBeat.
Kennedy said in a statement that the legislation would "put ... to the test" the idea that "private plans can do a better job of delivering prescription drug coverage than Medicare." Kennedy did not provide a cost estimate for the proposal (CQ HealthBeat, 2/21).
Separately, Sen. Dick Durbin (D-Ill.) on Monday said he would introduce legislation this week that would give beneficiaries "more options and more control" when prices for a drug plan in which they have enrolled "rise by more than 10% or a drug is dropped from the inventory" (Buedel, Peoria Journal Star, 2/21).
In related news, Ken Mehlman, chair of the Republican National Committee, on Saturday said that problems with the drug benefit are "unacceptable." Mehlman said, "We can't allow seniors having to worry about this stuff," adding, "We need to fix it. We will fix it." He said HHS Secretary Mike Leavitt is "totally committed" to addressing problems with the drug benefit (Hennessey, AP/Las Vegas Sun, 2/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.