Medicare Prescription Drug Discount Cards Provide Savings, Cause Some Confusion, Study Finds
Despite variations in savings offered through the Medicare prescription drug discount card program, the cards can "provide substantial savings over retail prices for medicines," according to a report released Wednesday by the Kaiser Family Foundation, the Atlanta Journal-Constitution reports. The report, prepared by Health Policy Alternatives for the foundation, is "the most comprehensive, independent analysis of the discount card program" since it was implemented June 1, according to the Journal-Constitution (Lipman, Atlanta Journal-Constitution, 7/29). Researchers compared the prices for seven Medicare drug discount cards available in Baltimore and a rural Maryland community with retail prices listed by the Maryland attorney general's "Prescription Drug Price Finder" and prices through mail order services run for the public by Costco and Drugstore.com. The report examined prices available between May 10 and June 28, but researchers "ultimately dropped the first two weeks of this period because of doubts about data reliability" (Kaiser Family Foundation study executive summary, 7/28).
According to the report, the Medicare cards offered prices 19% to 24% lower than retail in Baltimore and 17% to 22% lower than retail in the rural community (Dodge, Dallas Morning News, 7/28). "All of the cards had prices that were significantly less" than retail, study co-author Julia James said (Sherman, AP/Las Vegas Sun, 7/28). In addition, the report noted that prices in general were 27% to 32% lower than retail cost in Baltimore for medications purchased through mail order. According to the report, six of the seven studied Medicare drug cards had prices lower than Costco's mail-order program, while prices offered by Drugstore.com were "competitive" with those offered through the Medicare discount program (Kaiser Family Foundation study executive summary, 7/28).
The report said that the "excessive" number of cards available to beneficiaries "produces confusion and may discourage enrollment" (MacDonald, Hartford Courant, 7/29). The report also said that although has CMS provided drug price comparisons on the Medicare Web site, about 70% of beneficiaries do not use the Internet (Atlanta Journal-Constitution, 7/29). Individuals and groups who are helping beneficiaries research discount drug cards on the Medicare Web site "are often finding the Web-based information more perplexing than helpful," according to the report. Using the Internet to find the best savings is a "cumbersome" process, James said (Hartford Courant, 7/29). Study co-author Beth Fuchs added that there are "fewer choices than meets the eye" because some cards have the same discounts and use the same pharmacy networks. According to the report, there have been improvements in the information offered on the Medicare Web site and beneficiaries have experienced shorter waits when calling 1-800-MEDICARE (Barfield Berry, Long Island Newsday, 7/29).
During a Kaiser Family Foundation briefing to release the report, CMS Administrator Mark McClellan said the report's findings are similar to what the agency has found (Dallas Morning News, 7/28). A separate CMS report released Wednesday found that the discount cards provided savings of 11% to 18% on average retail prices and savings of 37% to 65% for generic drugs. The study also found that mail-order prices using the discount cards were slightly lower than those offered through Drugstore.com and Costco (Atlanta Journal-Constitution, 7/29). McClellan added that the program is "a work in progress," saying, "We're going to keep working on what we're learning here" (Long Island Newsday, 7/29). About four million Medicare beneficiaries have enrolled in the program -- more than half of the projected 7.3 million participants, according to McClellan. Of the four million enrolled, about 2.3 million were automatically signed up through their Medicare managed care plans (Hartford Courant, 7/29). McClellan said that about 100,000 beneficiaries enroll in the program each week. In addition, about one million of the roughly seven million beneficiaries eligible for a $600 federal subsidy to offset their drug costs have enrolled (Reuters, 7/28). McClellan said that officials soon will take additional steps to ease enrollment by allowing people to sign up electronically (AP/Las Vegas Sun, 7/28).
The Dallas Morning News reports that analysts said the Kaiser Family Foundation "provided a useful first look at the card program." However, they added that the limited time-frame and small geographic region studied means that it "lack[s] the breadth and scope to be the last word." George Kelemen, advocacy director for Texas AARP, praised the discounts but added that the "bigger problem is that retail drug prices continue to go up three to four times the cost of living" (Dallas Morning News, 7/28). The Kaiser Family Foundation study is available online.
NPR's "All Things Considered" on Wednesday reported on the study. The segment includes comments from McClellan and co-authors Mike Hash, a former Medicare official in the Clinton administration, and James (Rovner, "All Things Considered," NPR, 7/28). The complete segment is available online in RealPlayer.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.