The plan would have encouraged older Americans to buy the cards from private companies by giving some cards what amounted to a government seal of approval. After paying a one-time enrollment fee — not more than $25 — people could get discounts of up to 15 percent on some medicines, White House officials said.
Pharmacists and chain drug stores sued two years ago, arguing that the Bush proposal did not say who must subsidize the discounts. They also questioned whether federal officials had the power to promote the cards without congressional approval.
U.S. District Judge Paul L. Friedman stopped the program from getting under way saying he doubted the government had such authority. The judge later allowed the government to enter a new proposal. Critics charged the new proposal, submitted in March, was nothing more than a replica of the earlier plan.
Friedman agreed, saying it was “deja vu all over again.”
Many seniors currently buy drug discount cards from private companies.
“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,” Tricia Neuman of the Henry J. Kaiser Family Foundation told the NewsHour in June 2002.
Under the president’s plan, Medicare-backed discount cards would pool the purchasing power of seniors and lead to lower prices.
Tom Scully of the Centers for Medicare and Medicaid Services told the NewsHour last June that the idea behind the program “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… The best way is to organize 500,000 seniors in New York and 200,000 in Philadelphia and 100,000 in Washington, 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.'”
Representatives of drug store and pharmacist groups said the judge’s decision effectively killed the Bush administration’s idea in its current form.
“It’s dead in its tracks,” John Rector, a senior vice president for the National Community Pharmacists Association, said. “I hope they’ve learned their lesson.”
S. Lawrence Kocot of the National Association of Chain Drug Stores said the debate now shifts back to Congress “where a number of creative solutions and viewpoints should be considered.”
Administration officials did not immediately respond to the Associated Press’s request for a comment.
In the coming weeks, the president is expected to detail his plan to provide seniors with prescription drug coverage as part of Medicare. In his State of the Union address he told Congress “…all seniors should have the choice of a health care plan that provides prescription drugs.”