Rx Discount Card Programs Offer Small Savings, GAO Study Finds
Pharmacy discount cards on average save patients less than 10% on the retail price of prescription drugs "commonly taken" by seniors, according to a new General Accounting Office study. The Washington Post reports that the study "suggests that such programs are less useful" to seniors than the Bush administration, which proposed a discount card plan in July, has said (Goldstein, Washington Post, 1/4). The GAO study compared the prices of 12 brand-name treatments and five generic drugs purchased from 29 sources -- five discount card programs, 19 retail pharmacies and five Internet pharmacies -- in Chicago, Seattle, Washington, D.C., and a rural area in Georgia (Pear, New York Times, 1/4). The study found that the discount cards saved patients about $3.31 per prescription, or less than 10% of the retail price (Washington Post, 1/4). Specifically, the study found that patients who purchased brand-name drugs in the three cities paid an average of $62.94 with discount cards, only 8.2% less than the average retail price of $68.58. Patients who used the discount cards at five pharmacies in rural Georgia received "more substantial savings" -- a 12.8% discount. In addition, those who purchased generic drugs received "significant savings in percentage terms," the study found. However, because generic prices were lower to begin with, patients only saved "a few dollars" per prescription when they purchased such treatments with a discount card. According to the study, discount cards reduced the average price of generic drugs from $9 to $5.69, a 36.8% discount.
The GAO conducted the study at the request of six House Democrats -- Reps. John Dingell (D-Mich.), Henry Waxman (D-Calif.), Pete Stark (D-Calif.), Charles Rangel (D-N.Y.), Sherrod Brown (D-Ohio) and Mike Ross (D-Ark.) (New York Times, 1/4). The lawmakers have criticized the pharmacy discount card plan that President Bush unveiled in July and fear that the proposal would "drain political momentum" for a larger prescription drug benefit under Medicare, an issue that has "languished" in Congress (Washington Post, 1/4). In addition, they said in a letter to HHS Secretary Tommy Thompson that discount cards would not "provide prices that are significantly lower than those already available to seniors" (New York Times, 1/4). Under Bush's plan, pharmacy benefit managers would negotiate discounts with drug manufacturers and pharmacies and sell cards to Medicare beneficiaries for up to $25, allowing them to purchase pharmaceuticals at a 15% to 20% discount. Waxman said that based on findings in the GAO study, "seniors will receive meager savings at best" from the Bush administration's discount card plan (Washington Post, 1/4). "The drug card proposal will be a bitter disappointment for seniors," Waxman said, adding, "Seniors need a genuine drug benefit, not a drug card program with paltry benefits" (AP/Baltimore Sun, 1/4). The Wall Street Journal reports that the GAO study will offer Democrats "fresh ammunition" to attack Bush's discount card plan (Carroll, Wall Street Journal, 1/4).
According to CMS Administrator Tom Scully, however, the GAO study "makes our argument for us." He said that although the "existing discount cards don't work," Bush's plan would attract larger numbers of seniors, "thus creating enough market share for participating companies to negotiate bigger discounts" from drug companies (Washington Post, 1/4). HHS spokesperson William Pierce agreed and added, "We believe that some discounts are better than no discount" (New York Times, 1/4). Meanwhile, Anita Kawatra, a spokesperson for Merck-Medco Managed Care, which offers one of the pharmacy discount cards examined in the GAO study, said that the average 11% discount provided under its plan "is nothing to sneeze at," adding, "Frankly, 11% is pretty good." The GAO study also examined discount cards offered by AdvancePCS, Express Scripts Inc. and Wellpoint Health Networks Inc. (Wall Street Journal, 1/4).