Report Excludes Generics, Mail-Service Pharmacy, and, Most Importantly, Prices Cash-Paying Seniors Would Pay Without Discount Cards

Washington, DC; 04.30.04 — A new “analysis” of discounts to be offered by the forthcoming Medicare drug discount card program is misleading and riddled with errors, the Pharmaceutical Care Management Association ( PCMA) said today. PCMA is the national association representing pharmacy benefit managers (PBMs). The report was issued yesterday by the Minority Staff of the US House Committee on Government Reform.

“This report cherry-picks data and omits basic facts about the full range of options and discounts available to seniors through Medicare prescription drug discount cards,” said PCMA President Mark Merritt.

Mr. Merritt added, “The one simple fact that those who oppose the Medicare bill and their spin doctors are hoping people will forget is that those who enroll in a new Medicare drug discount card are likely to see discounts averaging 17 to 35 percent.”

According to a PCMA analysis, the report released yesterday on Capitol Hill fails the credibility test for a number of reasons:

The report completely ignores generic drugs, which comprise nearly half of the drugs seniors commonly use and where the greatest discounts are typically found. The report only looks at a select list of brand-name drugs.

A recent PCMA survey of card sponsors finds that seniors will see average discounts of 17 percent for brand-name drugs and 35 percent for generics with Medicare PBM prescription drug cards, compared to the cash price seniors would otherwise pay without a discount card.

The report understates the savings available through the discount cards. Each of the drugs listed in the report could be obtained much more affordably through mail-service pharmacies as listed on the CMS website. A PCMA analysis suggests the savings could be an additional 10 to 19 percent.

The report fails to note that both Drugstore.com and Costco.com are Internet/mail-service pharmacies, which is why they have greater discounts than the retail pharmacies included in the report.

The report uses a diversionary, apples to oranges, comparison that looks at the prices seniors would pay with the discount card to what other consumers pay under price-controlled systems in other countries. The report totally overlooks the obvious comparison of how much seniors will pay with the discount card versus what they would pay without it.

The report ignores the significant assistance that the $600 dollar annual subsidy will provide to qualifying low-income Medicare beneficaries through the Transitional Assistance Program.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614

New Industry Survey Data Details Average Discounts Medicare Beneficiaries Likely to See with Medicare PBM Cards in Retail, Mail-Service Pharmacies

Washington, DC; 04.20.04 — Medicare beneficiaries enrolling in PBM-sponsored Medicare prescription drug discount cards are likely to see average discounts of 17 percent for brand-name drugs and 35 percent for generic drugs, according to a first-of-its-kind survey of PCMA member companies released today by the Pharmaceutical Care Management Association (PCMA).

In conjunction with the release of the survey data, PCMA also announced the launch of a new television and print advertising campaign, “Being Carded Never Felt So Good,” to raise awareness about the value that PBM-administered Medicare drug discount cards can provide to millions of seniors and disabled beneficiaries. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“We are launching today’s initiative to highlight the value that PBMs can provide to seniors through the Medicare drug discount card program,” said PCMA President & CEO Mark Merritt in releasing the survey data and announcing the new advertising initiative. “Because of PBMs, beneficiaries enrolling in Medicare-sponsored PBM drug discount cards will see significant discounts and pay less for their prescription drugs. This is good news for seniors.”

As part of its efforts to raise awareness about the value PBMs can bring to the Medicare program, PCMA retained a third-party researcher to conduct a blind industry survey about the level of savings Medicare beneficiaries can expect in both the retail and mail-service settings on both brand-name and generic prescription drugs and the access to participating pharmacies. The survey is unique with respect to the Medicare drug discount card in that â?? for the first time ever â?? it distinguishes the level of discounts expected for brand-name and generic prescriptions in both the retail and mail-order pharmacy settings. These discounts are an average â?? some beneficiaries will see greater discounts, while others will see less generous discounts than the averages listed here.

These data reflect the findings of PCMA member company PBMs that expect to enroll collectively at least 1.34 million Medicare beneficiaries. Among the survey’s key findings:

PCMA Launches New Medicare Drug Card Advertising

Average Discounts for Seniors Filling Prescriptions with Medicare PBM Discount Cards in Retail Pharmacy

Brand-name drugs: 16 percent
Generic drugs: 34 percent
Average Discounts for Seniors Filling Prescriptions with Medicare PBM Discount Cards in Mail Order Pharmacy

Brand-name drugs: 23 percent
Generic drugs: 39 percent
Average Weighted Overall Discounts for Seniors Filling Prescriptions with PBM Discount Cards

Brand-name drugs: 17 percent
Generic drugs: 35 percent
Pharmacy Access

The average number of participating pharmacies for surveyed companies in the Medicare drug card program is 44,250 pharmacies.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614

Savings for Low-Income Seniors Nine Times That of Higher-Income Seniors

Washington, DC; 04.14.04 — Medicare-sponsored prescription drug discount cards may well provide the greatest relief to beneficiaries with very low-incomes and/or those beneficiaries with poor health and high prescription drug costs, according to a new analysis conducted by Harvard Medical School researchers and posted on the website of Health Affairs, the Pharmaceutical Care Management Association said today. PCMA is the national trade association representing America’s pharmaceutical benefit managers (PBMs).

“The analysis provided by researchers at Harvard Medical School and posted on Health Affairs’website is a fresh reminder that Medicare drug discount cards will help lower the cost of prescription drugs for millions of seniors,”said PCMA President & CEO Mark Merritt. “For low-income seniors and those beneficiaries in poor health, the data suggest the savings are likely to be even more pronounced.”

The Medicare prescription drug discount card program is an interim measure that becomes effective on June 1. PCMA member companies expect to participate by offering beneficiaries national and regional Medicare-sponsored drug discount cards and through partnership with retail pharmacies and Medicare Advantage health plans. PCMA estimates that a vast majority of the Medicare-sponsored drug discount cards will be administered by PBMs.

Noting that Medicare beneficiaries without any prescription drug coverage “face the highest retail drug prices,”the analysis estimates that beneficiaries are likely to see an average savings of 17.4 percent below what cash-paying customers would pay at the retail pharmacy counter. According to the analysis, the average savings for brand-name drugs are likely to be 14 percent. For generics, the average savings are likely to be 41.1 percent. In 2004 dollars, these figures would translate to average beneficiary savings of $238 dollars.

The data suggest that low-income beneficiaries may benefit most from the new Medicare drug discount cards. Significantly, these findings do not take into account the $600 dollar annual subsidy that will be available to low-income beneficiaries enrolling in a Medicare-sponsored drug card program:

According to the analysis, in 2000, approximately two million beneficiaries with very low incomes lacked drug coverage. For these beneficiaries, out-of-pocket spending on prescription drugs represented a full 10 percent of their income in 2000.
When compared with higher income seniors â??those with incomes above $40,000 â??the savings accruing to very low-income seniors because of the drug discount card becomes much more pronounced. The analysis finds that as a proportion of their income, very low-income seniors will see savings nine times that of higher-income seniors.
For those beneficiaries with self-reported “poor”health and/or those with high prescription drug costs, the Medicare drug discount card is also likely to provide relief:

According to the analysis, out-of-pocket savings as a percent of income for beneficiaries in poor health without drug coverage will be nearly five times as much as a beneficiary in “excellent”health.
Moreover, in 2000, the highest-spending 10 percent of seniors without drug coverage paid $1,874 or more in out-of-pocket costs on prescription drugs. The dollar savings accruing to these seniors — $481 dollars on average â??are estimated to be nearly four times as much as that of the average beneficiary savings.
While the analysis did not distinguish between savings provided at the retail pharmacy counter and those available through the mail-order pharmacy option, other data suggest that the mail-order pharmacy option will provide seniors with even deeper discounts â??in some cases more than 50 percent.

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614