Medicare Pilot Program To Provide Prescription Drug Coverage for 50,000 Beneficiaries

Beginning this fall, 50,000 Medicare beneficiaries will receive prescription drug coverage for some of their most expensive medications under an 18-month pilot project included in the new Medicare law, HHS Secretary Tommy Thompson and CMS Administrator Mark McClellan announced on Thursday, the AP/Billings Gazette reports. Under the project, which has a budget of $500 million and will run until 2006, Medicare will pay for some 25 at-home treatments for diseases such as cancer, multiple sclerosis and rheumatoid arthritis (AP/Billings Gazette, 6/25). The program will include 11 cancer medications, such as Novartis' Gleevec and AstraZeneca's Iressa and Nolvadex; three drugs for rheumatoid arthritis, including Abbott Laboratories' Humira and Amgen's Kineret and Enbrel; Actelion Pharmaceuticals' pulmonary hypertension drug Tracleer; and treatments for the bone disorder Paget's Disease and hepatitis C (Lueck, Wall Street Journal, 6/25). The program will be administered by pharmacy benefit manager Caremark Rx (Bloomberg/Baltimore Sun, 6/25). It will be run by TrailBlazer Health Enterprises, a subsidiary of Blue Cross Blue Shield of South Carolina, under a $8.7 million contract (Pear, New York Times, 6/25).

Federal officials estimate that beneficiaries' savings through the pilot project could range from 55% to nearly complete coverage, according to Bloomberg/Sun. Through the program, beneficiaries who take Gleevec could save nearly 90% on the drug's estimated annual cost of $45,952, and those taking one of four multiple sclerosis medications could save 75% on their annual cost of $16,298, Bloomberg/Sun reports (Bloomberg/Baltimore Sun, 6/25). The program, intended to work the same way as the full Medicare drug benefit, will include a $250 deductible and copayments. It requires beneficiaries to be responsible for all drug costs between about $660 and $1,200 (Gellene/Kemper, Los Angeles Times, 6/25). Low-income beneficiaries who participate in the project will receive extra help from the federal government and will pay no more than $60 per year for any drug covered under the program, according to Thompson (New York Times, 6/25).

Thompson estimates that some 500,000 to 600,000 Medicare beneficiaries who have no other drug coverage will be eligible as one of the 50,000 participants, who the federal government will select at random. About half of the participants will have cancer because the Medicare law specified that 40% of the funds for the program be spent on cancer treatment. Beneficiaries' incomes will not be considered for participation in the program, according to officials. Beneficiaries who wish to participate can apply between July 6 and Sept. 30 on the HHS Web site or by calling 1-800-MEDICARE. Coverage could begin as soon as Sept. 1 for patients who apply by Aug. 16.

"Through this coverage, seniors will save thousands of dollars on essential medicines that they can take at home," Thompson said (Bloomberg/Baltimore Sun, 6/25). He added, "This will pique the interest [in the Medicare drug benefit] of all seniors and people with disabilities" (Heil, CongressDaily, 6/25). McClellan added, "In some cases, by avoiding the need for doctor visits and intravenous injections, costs and medical complications may be reduced and access and ease of treatment will increase" (Bloomberg/Baltimore Sun, 6/25). Wendy Selig, vice president of the American Cancer Society, said, "It appears that 25,000 cancer patients will benefit from this program and gain coverage for life-saving medications. Coverage for oral cancer drugs was a huge priority for us." Sens. Olympia Snowe (R-Maine) and Jay Rockefeller (D-W.Va.) and Rep. Deborah Pryce (R-Ohio), who introduced legislation calling for a similar program, also praised the program, according to the New York Times. Snowe said, "Increasingly, new cancer drugs are available in an oral form, and patients battling cancer should not have to make unnecessary trips to the doctor's office to receive treatments" (New York Times, 6/25).