JIM LEHRER: Susan Dentzer of our health unit has our prescription drugs report. The unit is a partnership with the Henry J. Kaiser Family Foundation.
SUSAN DENTZER: At this supermarket in Washington, D.C., a Medicare marketing blitz was underway earlier this week.
MARY ANN WAGNER: Attention customers, if you have a few minutes to join us for lunch in front of the pharmacy, we're going to be explaining the Medicare prescription drug discount card.
SUSAN DENTZER: Pharmacist Mary Ann Wagner made the pitch to seniors. She explained that, starting in June, new Medicare-endorsed cards will offer sizable discounts off the retail prices of prescription drugs. Wagner heads a group called the Pharmacy Care Alliance that is offering one of the cards. They're an interim step on the road to expanded drug benefits for Medicare enrollee's enacted into law last year.
MARY ANN WAGNER: For the next 18 months they've approved a discount card program. And so those Medicare beneficiaries, people over 65 years old or people who are eligible for Medicare, and who are not on Medicaid, can take advantage of quite a bit of savings on their prescription medications.
SUSAN DENTZER: Shopper Archie Blair, who's 76, was pleased.
ARCHIE BLAIR: Cheaper is better for me, you know, because the less I have to pay, the less will come out of my check. I'm thankful that the government is helping in that direction.
SUSAN DENTZER: A new Medicare analysis says the cards offer discounts of 10 percent to 17 percent off average retail prices paid by Americans, including those with drug coverage. They also offer 30 percent to 60 percent discounts on generics.
Medicare has now given the green light to 73 discount cards overall -- 40 of them available nationally, and to 33 available only in certain areas of the country. Most are being offered by companies that want to offer full Medicare drug benefits in 2006.
At a news conference this week, Health and Human Services Secretary Tommy Thompson outlined key features of the cards.
TOMMY THOMPSON: The law allows for an annual enrollment fee of up to $30 per year. Some card companies, however, are offering a smaller fee or no fee at all.
SUSAN DENTZER: He said beneficiaries can sign up this month for one card only to be used from June to December 2004. If they choose, in November of this year they'll be able to enroll in a different card to use in 2005. Thompson noted another key feature of the discount card plan: That an estimated 7 million low-income Americans would get an additional break.
TOMMY THOMPSON: On top of the discounts, these Americans are going to receive an additional $1,200 over the next 18 months to defray the cost of their drugs. $600 in the remaining year of 2004, and then another $600 in 2005.
SUSAN DENTZER: That's good news for low-income Medicare enrollees like Gladys Parrish, who's 87. Until the $600 is used up, she'll have to make only modest co-payments to get her medications, equal to just 5 percent of the costs of the drugs.
GLADYS PARRISH: I think it's nice. I appreciate it, I'll tell you.
SUSAN DENTZER: At this demonstration earlier this week, government employees showed Parrish and other seniors a new tool. It's on the government's Medicare Web site, Medicare.gov. It allows users to type in the names of their drugs and the doses they take, and then shows the prices obtainable through different discount cards.
SPOKESPERSON: Now look, see the nitroglycerin here? You can get that for 60 cents through this drug card at the Walgreen's, 59 cents through that drug card at the Walgreen's.
SUSAN DENTZER: As of this week, prices for just 56 cards could be searched on the site. Information on the rest is expected to be available by the end of this month.
But as with everything about the new Medicare law, there's a dispute over whether all this amounts to a boon or a bane. House Minority Leader Nancy Pelosi, a California Democrat, criticized the card program at a news conference this week.
REP. NANCY PELOSI: Cards are expected to offer discounts, but there is no minimum discount that guarantees savings for seniors. Drug companies have already begun increasing their prices so that they can offer "discounts" without losing a dime in profits. It is just like the store that marks up its goods right before a sale, you know that. In the end, seniors pay more, and that's a sad statement. That's a bad deal for seniors, but a good deal for the drug companies.
SUSAN DENTZER: But Thompson pointed to the competition already under way among card sponsors to sign up enrollees. As a result, he said, drug prices are now in flux and trending downward.
TOMMY THOMPSON: You know, we posted the prices this week. So the drug card companies are going to look at the prices that their competition has, and they're going to go back to the wholesalers and to the pharmaceutical companies and say, "you gave a better deal to card X. I want the same deal." And you're going to see, I think, a trending down of the prices come next week.
SUSAN DENTZER: Still, even seniors' groups disagree about the value of the cards. The AARP has long operated a mail-order pharmacy service, and will now offer its own Medicare-endorsed discount card as well.
Not so another seniors' group, the National Committee to Preserve Social Security and Medicare. Barbara Kennelly is the group's president. She says that rather than bothering with the cards, Medicare beneficiaries would have preferred to get full drug coverage sooner.
BARBARA KENNELLY: It's a distraction. That's not what seniors asked. What they asked for was help in paying for their drugs, and what they got is this complicated situation that will give them very little help.
SUSAN DENTZER: What's more, Kennelly says, millions of Medicare enrollees will find the hunt for the right discount card too confusing.
BARBARA KENNELLY: A lot of seniors don't have a computer, but yet where you can get information about which drugs are discounted or what drugs are covered is from your computer. And if you don't have one, you can go into the drugstore, and you say, "well, here's my card. What's my discount?" And they'll say, "oh, you know, you thought you had it, but last week they changed it." You'll have no way of knowing.
SUSAN DENTZER: But Thompson said this week that the government has taken a number of steps to help Medicare enrollees who aren't computer-savvy.
TOMMY THOMPSON: By calling 1-800-Medicare, which is staffed 24/7, and we've just tripled the number of reception and operators, people with Medicare are going to get a trained counselor who will take some basic information from the seniors, particularly the medicines they take. Then the counselor will send them a personalized kit with all the information needed to compare cards and make that informed choice.
SUSAN DENTZER: The government is now sending representatives into senior centers around the country to explain the program further. All told, Medicare plans to spend $22 million this year to educate enrollees about potential savings from discount cards.