Walgreen Executives Criticize Bush Rx Drug Discount Plan

Executives at Walgreen Co., a national drugstore chain, said Tuesday that President Bush's pharmacy discount card plan would "hurt the bottom line of pharmacies while failing to provide real savings" for Medicare beneficiaries, the Chicago Sun-Times reports (Wisby, Chicago Sun-Times, 2/20). Under the plan, which Bush unveiled last July, pharmacy benefit managers would negotiate discounts with drug makers and pharmacies and sell cards to Medicare beneficiaries for up to $25, allowing patients to purchase pharmaceuticals at a 15% to 20% discount. The National Association of Chain Drug Stores and the National Community Pharmacists Association filed suit last July to block the proposal, arguing that the Bush administration lacked the authority to implement the plan without congressional approval and drafted the plan without open meetings or a public comment period, a violation of federal rules. Last September, U.S. District Court Judge Paul Friedman issued a temporary injunction against the plan. In November, he issued an "unusual clarifying memo" that allowed CMS to revise the plan. Medicare officials said in January that they would publish for public comment a revised version of the proposal that may require drug makers to assume part of the cost of the discounts offered in the plan to address the concerns of pharmacists and courts (California Healthline, 1/17). However, Walgreen representatives "think Bush is primed to come out with a new proposal that is very similar to the old proposal," Walgreen executive Phil Burgess said Tuesday at a news conference in a Chicago drugstore. He added, "Our net profit is three cents on the dollar. The [drug] manufacturers' profit is 18 to 19 cents on the dollar."

Rep. Jan Schakowsky (D-Ill.) also criticized Bush's pharmacy discount card plan at the news conference. She said that the proposal would "reduce choice and limit access" to pharmacists and provide only "minimal savings" for Medicare beneficiaries. According to a study that the General Accounting Office released in January, pharmacy discount cards on average save patients less than 10% on the retail price of prescription drugs. "It's not even worth its weight in plastic," Schakowsky said, adding that the discounts offered under Bush's plan "come directly out of the hide of the pharmacist," rather than drug manufacturers. "We are working for a benefit under Medicare as the only reasonable alternative," Schakowsky said (Chicago Sun-Times, 2/20).