Medicare Drug Benefit Could Affect Availability of Pharmaceutical Discount Programs

The Medicare prescription drug benefit could affect programs offered by pharmaceutical companies that provide no-cost or discounted medications to low-income patients, the New York Times reports.

In 2004, an estimated three to four million U.S. residents received no-cost medications valued at about $4.1 billion through such programs. However, the prescription drug benefit might prompt pharmaceutical companies to end their programs after "taking the position that the recipients are now eligible for Medicare drug coverage," according to the Times.

Pharmaceutical companies also could require participants to select between their programs and the Medicare prescription drug benefit. Under the 2003 Medicare law, patients "cannot get drug subsidies" from pharmaceutical companies and also participate in the prescription drug benefit, according to the companies, the Times reports.

Ken Johnson, senior vice president for the Pharmaceutical Researchers and Manufacturers of America, said that the Medicare prescription drug benefit could reduce participation in such programs by as much as 40%.

CMS Administrator Mark McClellan maintains that pharmaceutical companies can continue their programs, provided that participants do not count the no-cost or discounted medications they receive toward Medicare copayments or deductibles.

Several pharmaceutical companies have sent proposals to HHS for guidance, and the department Office of Inspector General has begun to review their legality.

HHS also has said that pharmaceutical companies could establish a pooled program, but that could "be a hard sell to the companies," which might "fear that they will end up subsidizing a competitor's drug," the Times reports (Saul, New York Times, 11/7).

Additional information on the Medicare drug benefit is available online.