Most of the initial 3 million card enrollees belong to Medicare Advantage plans
WASHINGTON, D.C.-Less than 3 million Medicare beneficiaries had signed up for Medicare drug discount cards when the program was launched officially June 1. Congressional Democrats and patient advocates termed the program a 'dismal failure' due to its complexity and relatively low benefits, while Bush administration officials hustled to get the numbers up.
The tally would have been much worse for Medicare if MCOs did not automatically sign up elderly plan members. Medicare Advantage programs accounted for a large portion-2.3 million Medicare patients-of the early card holders.
Medco, for example, said that it had more than 600,000 seniors enrolled in several card programs that it administers for Medicare health plans, but only about 25,000 individuals in its stand-alone card. Medco estimates that it will sign up about 500,000 seniors through four plans: Highmark Blue Cross/Blue Shield, the Health Plan of the Upper Ohio Valley, United Health Care and Western Health Advantage. The PBM also expects to enroll 81,000 seniors for the New Jersey state senior drug assistance program.
DRUG PRICES IN SPOTLIGHT
The Bush administration has predicted that more than 7 million of some 35 million Medicare enrollees will sign up for the cards, but CMS may find it hard to reach that goal as political maneuvering continues to shape the debate. Democrats generally prefer a more centralized Medicare pharmacy benefit with the government negotiating prices and have criticized administration efforts to reshape the program.
Republicans counter that the discount card provides real savings now while seniors wait for the broader drug benefit to kick in, and that much of the confusion about the program comes from misinformation in the media and from politicians.
Patient groups including AARP and Families USA rolled out studies documenting how hefty drug company price increases are offsetting real savings from the card program. AARP claims that manufacturer prices for 200 widely-used brand-name drugs increased three times the rate of inflation over the last four years, while Families USA documents how prices for the 30 drugs most frequently used by the elderly rose 6.5% last year, more than four times the rate of inflation.
Additional reports challenge the Medicare card program directly. Families USA presented data indicating that drug discounts negotiated by the Department of Veterans Affairs (VA) significantly exceed the savings offered by Medicare cards. And Rep. Henry Waxman (D-Calif.) released a study on June 1, showing that online pharmacies offer lower prices on certain drugs than the cards for seniors.
The Pharmaceutical Research and Manufacturers of America (PhRMA) countered that in recent months, drug price inflation has been about 1.5%-much lower than the rate of price increases for all medical services, which the manufacturers consider a more appropriate comparison.
PhRMA also presented data indicating that Medicare cards offer reductions of 16% off drug retail prices and 22% off mail-order prices and noted that including generic drugs in these studies would lower overall price hikes.
Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), said that card sponsors are passing on 80% to 90% of negotiated discounts-an activity that CMS is monitoring through aggregate data on negotiated prices submitted by PBMs and other sponsors.
Meanwhile, pharma companies announced plans to link their own drug discount programs to Medicare card sponsors by offering products free to low-income seniors who exhaust their $600 subsidies.
A fair question is whether the card program offers sufficient benefits for seniors to justify spending millions of dollars to explain the system and help beneficiaries sign up.
Many hope the rhetoric will diminish after November, and both parties will work to establish a reasonable pharmacy benefit for seniors in 2006.
[Sidebar]
Critics say drug price hikes offset real savings.
[Author Affiliation]
BY JILL WECHSLER | WASHINGTON BUREAU EDITOR
