Web Still Helps the Medicine Go Down

Sites Undercut Some Discounts for New Medicare Drug Cards

The federal government yesterday announced discounts available to users of the planned Medicare drug cards. But despite promises of big savings for elderly and disabled Americans, Internet pharmacies still beat some of the cut-rate prices under the program.

The government promised savings of up to 25 percent on brand name medications and 50 percent or more on generics. But the mail-order and Internet pharmacy, drugstore.com, yesterday offered lower prices than the discount cards on six of 10 widely prescribed medications surveyed by The Washington Post. And a Canadian Internet pharmacy had better prices on five of six drugs that were sold.

Government officials described the discount card system that goes into effect June 1 as a "revolutionary" first step in the multi-billion Medicare prescription drug benefit program that was passed by Congress in December. Until now, Medicare, the federal health program for 41 million elderly and disabled Americans, has only covered drugs administered in a hospital or directly by a physician.

The government estimates about 7 million people will sign up for a card at a cost of up to $30, with enrollment beginning Monday. The card program will disappear on Jan. 1, 2006 when a more comprehensive drug benefit will be rolled out.

The program will cost the government "tens of millions of dollars" to run, said Mark B. McClellan, who heads the federal agency that manages Medicare. That includes $18 million on a multi-media advertising campaign that will encourage Medicare recipients to try it out, he said.

Some patient advocacy groups say the Medicare Web site is doing a disservice to seniors by not posting prices offered by major internet and mail-order pharmacies. The site does provide information on drug assistance programs run by state governments and pharmaceutical manufacturers.

"Anything that helps one person get a prescription filled is better than nothing," said Robert M. Hayes, president of the Medicare Rights Center, a New York-based senior consumer counseling group. "But at the end of the day the real benefit of these discount cards will be to get people to take stock and look at all of their options."

Hayes's organization lists more than a dozen options on its Web site, www.medicarerights.org. In Maryland, more options can be found on the attorney general's Web site, www.oag.state.md.us, which on Tuesday began posting prices offered by pharmacies throughout the state.

With the rollout of the new program, seniors will still need to check prices carefully for the best deal. Take Celexa, a popular drug to treat depression. The price offered by a Medicare card available in the Washington region was $73.03 for 30 tablets, according to data released yesterday on the www.Medicare.gov Web site. The same prescription for these 20-milligram tablets could be filled by drugstore.com for $68.99, plus $1.49 for shipping.

And Internet-based Granville Pharmacy, of Vancouver, British Columbia, had a substantially lower price: $46.52. The Food and Drug Administration warns consumers that drugs purchased from outside the United States may not "conform with the manufacturing and quality assurance procedures mandated by U.S. laws and regulations." Some state governments have begun steering patients to Canadian pharmacies that state officials have inspected.

But the Medicare program had a remarkably better price for Nexium, a heartburn medication. One discount card offered a 30-day supply for $95.31, more than 20 percent lower than the prices charged by drugstore.com ($120.99) and Costco.com ($125.47). Granville Pharmacy, however, sold a 28-capsule package for $66.68.

All told, 73 Medicare-endorsed discount cards will be offered by more than two dozen companies and organizations, including AARP. So far, 35 cards have submitted pricing data to Medicare. More prices will be posted on the Medicare Web site next week, and Department of Health and Human Services Secretary Tommy G. Thompson said yesterday he expects prices to drop further Patients can price drugs on the Medicare Web site or request a quote by calling 800-MEDICARE (800-633-4227).

Ian D. Spatz, a vice president of drug manufacturer Merck & Co., said some discounts are "going to take some time to show up because we're only now beginning to sign contracts with these discount card plans.

"You are going to be seeing very transparent price competition."

The card program comes with an immediate benefit for low-income Medicare beneficiaries: a $600 credit on drug purchases for people who have incomes of less than $12,570 for singles and $16,863 for married couples and who are not covered by Medicaid. Card fees also will be waived but some copays may be charged.

"These people should run -- not walk -- to sign up," said Hayes of the Medicare Rights Center.

Low-income seniors also may be eligible to receive benefits from public assistance programs in their states. That means Vera Frost, 78, of Baltimore can get the $600 Medicare card credit to buy her diabetes, heart and blood pressure medicines. And when that's used up she can continue to buy her medications through a state program.

"I pay $10 per prescription in that program," said Frost, whose monthly income totals $804. "It's worked out unbelievably well."

McClellan said in recent interviews he expects competition among card sponsors to drive prices down further.

While cheaper drugs may be found "somewhere in the world," he said, ". . . It's going to be likely that seniors can get lower prices on drugs" through the Medicare program.

He said "significant" discounts are possible because card sponsors have had greater negotiating power than retailers traditionally have.

"They were able to go to the drug manufacturers and say: 'We've got millions of beneficiaries -- or hundreds of thousands of beneficiaries -- who are pulling together here and we demand a lower price,' " said McClellan, who took over the Centers for Medicare and Medicaid Services (CMS) last month.

Medicare beneficiaries are under no obligation to sign up for a card, but if they do they can choose only one. They can change cards only once, when enrollment for the 2005 program begins this fall. Card sponsors can charge different annual fees -- but no more than $30 -- and different prices for the same medications. They can change prices once a week.

Some advocacy groups expect many seniors to be flustered by the array of choices. More than two dozen cards will be offered in the Washington region alone. And even if patients settle on a discount card some soon may discover another card has better prices.

"I was just down in Florida visiting my 88-year-old father who is very hard of hearing and doesn't see that well," said Robin Vahle, a senior project manager for health insurer CareFirst BlueCross BlueShield, which administers Maryland's senior drug assistance program. "Thank-you-God, my father already has a prescription program. I am trying to imagine him calling to get this information over the phone from 1-800-MEDICARE.

"The complexity in deciding which card to choose will be: If I get card A, my Celebrex has a great discount. But, oh, on card B the discount isn't as good on my Celebrex but it is better on my Aciphex. So which ones saves me more money? Ohhh! But card C gives Celebrex and Aciphex at pretty good prices. But -- ohhh! -- the price of my third drug isn't as good. What should I do?"

Some Democratic lawmakers said better discounts could have been obtained if the Bush administration had negotiated directly with drug manufacturers. Such negotiations were not allowed under the Medicare benefits legislation.

"The Bush administration drug cards flunk the truth-in-advertising test," Sen. Edward M. Kennedy said yesterday in a statement. "They're no solution for sky-high drug prices."

HHS Secretary Thompson said discounts posted on the Medicare Web site yesterday averaged about 17 percent for brand-name drugs and 30 percent for generics. "Huge savings," he said.