Prescription Drug Discount Cards
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SUSAN DENTZER: It’s no secret that many senior citizens are having trouble paying out of pocket for their prescription drugs, but some like Alvin and Ruth Shapiro are feeling far more than a slight pinch.
ALVIN SHAPIRO: Drugs are eating me up. Between me and Ruth, we’re just in bad physical shape, and the tremendous burden of shopping and calling up and “where is it cheaper?” and “where is it not cheaper?” and “stay away from this drugstore,” and “go to this pharmacy,” it’s a terrible drain, really.
SUSAN DENTZER: Both in their early 80s, the Shapiros are in such poor health that a list of their ailments could practically fill a medical encyclopedia. And there’s the long list of drugs they take regularly, including Ambien for insomnia, Singulaire for Ruth’s asthma, Lipitor to lower cholesterol. It all adds up to more than two dozen drugs at an astounding cost of $16,000 a year. That’s well over half of the annual income they draw from Social Security and their retirement savings.
ALVIN SHAPIRO: I’m not poverty-stricken, but I might be pretty soon.
SUSAN DENTZER: The situation isn’t much better for Penny DeRose. She’s a 71-year-old travel agent whose income plummeted after September 11.
PENNY DeROSE: I was making around $26,000 a year. Now I make, if I’m really lucky, $600 for the month.
SUSAN DENTZER: DeRose spent much of her youth as a showgirl in Las Vegas. Today she’s battling diabetes and a number of other complications. As a result, she spends more than $6,000 a year on prescription drugs, or about 40 percent of what she gets from her job and her Social Security checks. She’s devised various ways of scraping by.
PENNY DeROSE: I just picked up, like, four prescriptions yesterday, but I couldn’t get them on supply. I got 15 pills of this and 15 pills of that. Thirty pills of this, like something I take 60 a month. So I got half.
ALVIN SHAPIRO: Are you going to take care of me?
SUSAN DENTZER: It’s no wonder that the Shapiros, DeRose, and similarly placed seniors want to see the federal Medicare program expanded to pick up much of the cost of outpatient prescription drugs, but Congress is still mired in debate over enacting a drug coverage plan. So in the interim, millions are turning to another option: Using prescription drug discount cards. Leaf through a newspaper or flip on the television nowadays and you’ll probably see advertisements for these cards.
COMMERCIAL SPOKESMAN: Attention: People without prescription plans, including those on Medicare, now you can get the best price on your prescriptions with The People’s Prescription Plan. Average savings with this valuable plan are $36 a month.
SUSAN DENTZER: For fees ranging anywhere from about $15 to $100 a year, the cards offer discounts off the typical retail price for a prescription. Those discounts can range from just a few cents per prescription to as high as 10 to 20 percent. The sponsors of the cards can offer those price breaks because they pool together the purchasing power of lots of customers.
As a result, they’re able to negotiate lower dispensing fees from pharmacies and sometimes lower drug prices from pharmaceutical manufacturers. Tricia Neuman, a Washington health policy analyst for the Henry J. Kaiser Family Foundation, recently co-authored a study of the cards.
TRICIA NEUMAN, Henry J. Kaiser Family Foundation: These cards are offered by a variety of organizations. Probably the main sponsor is what’s called pharmacy benefit managers. These are businesses that pool together resources. They negotiate with pharmaceutical companies, and they sort of consolidated the middleman to offer benefits through discount card programs.
SUSAN DENTZER: In recent months, major pharmaceutical companies like Pfizer and Merck have also brought out cards that offer seniors discounts on the medications those companies produce. And this summer Together RX, a discount card offered by eight pharmaceutical companies, is scheduled to make its debut.
Amid the variety of card options now available, we wonder just how much help they could provide people who incur big charges for prescription drugs, so we took lists of the medications taken by the Shapiros and by Penny DeRose to independent health policy consultant Michael Hash. Working with the Kaiser Foundation’s Christina Hanson, Hash and his colleagues produced an analysis. Since there are far too many discount cards on the market to examine all the options, they take several of the most promising ones.
MICHAEL HASH, Health Policy Consultant: First, we selected three discount card programs, each of which had a mail order and a retail pharmacy access program and also one Internet pharmacy.
SUSAN DENTZER: Hash says that determining the potential savings was enormously time-consuming and would be for seniors.
MICHAEL HASH: Just the seven options that we looked at took a good bit of time because you have to make sure you’re pricing the products comparably, you have the right strength information, the right quantity information, and of course prices are subject to change without notice.
SUSAN DENTZER: Even so, Hash’s analysis showed that discount card programs could produce a reasonable amount of savings.
MICHAEL HASH: Mr. and Mrs. Shapiro are currently spending about $16,000 a year for the drugs that they’re taking. What we found in the seven options we looked is that from any one option, the best they could do would give them savings of about 5 percent over what they’re currently spending or a range of a low of about $50 if they bought directly from an Internet pharmacy to a high of about $800 if they bought from one of the cards that produced the best savings for them.
SUSAN DENTZER: And if the Shapiros use several different discount card and mail order options to get the best prices on each of their drugs, they could save as much as $1,700 a year. As for DeRose, her savings could be substantial, too. One card Hash analyzed could save DeRose a total of 8 percent, or about $500 a year.
MICHAEL HASH: Now if she were willing to enroll in multiple cards, in fact, in two card programs, she could increase her annual savings from 8 percent to 10 percent, or to a little over $600 a year.
SUSAN DENTZER: When we showed those figures to Penny DeRose, she was impressed.
PENNY DeROSE: You know what it means? It means that I might be able to take all of the medications I’m supposed to take instead of just the ones I can pay for this month.
SUSAN DENTZER: Alvin Shapiro was also impressed with the potential savings of $1,700 a year.
ALVIN SHAPIRO: That’s…that’s a goodly amount. That’s a goodly amount. I would go out of my way to the extent that I could, considering all of these problems that I have, to do something about this and try to pick up some of that volume. Even if it were only $1,000, it would be worth it.
SUSAN DENTZER: In fact, the Bush administration has concluded the discount cards are such a good idea that Medicare should put its own seal of approval on some of them. That could enable all 39 million of the program’s enrollees to get even bigger drug discounts through a series of cards sponsored by private groups or companies that agree to meet criteria spelled out by the government. Tom Scully administers the Medicare program.
TOM SCULLY, Centers for Medicare & Medicaid Services: What can happen now in the seniors population is they get six cards in their wallet and they’re splintered. So the basic idea was to use the power of Medicare’s trust with seniors and the power of our 39 million seniors to get the market leverage to get discounts.It makes a lot of sense, I think.
The best way is to organize, you know, 500,000 seniors in New York and 200,000 in Philadelphia and 100,000 in Washington, you know, to get them in a cooperative and go to the drug company and say, “We’re all here to buy in a group and we want a discount.”
SUSAN DENTZER: There’s just one problem. For now, the proposal for Medicare-endorsed cards is tied up here in federal district court in Washington. That’s the result of a lawsuit brought by chain drugstores, the fear that deep discounts on drug-dispensing fees will eat into their profits. The government is fighting the lawsuit. But as a hedge against losing the case, Scully is also lobbying Congress for legislation that would allow the administration to put the Medicare card plan into effect.
Tricia Neuman of the Kaiser foundation says that Medicare-backed discount cards may be seniors’ best hope for short- term relief, in light of the congressional stalemate over a Medicare drug benefit.
TRICIA NEUMAN: People are so eager to get some form of help that 10 percent or 8 percent or whatever it is they can get is something, and something is certainly better than nothing.
SUSAN DENTZER: But for now millions of seniors like Alvin Shapiro may have to swallow high drug costs for a while longer.