Bush announces Rx discount card program

September 1, 2001

Pharmaceutical Representative

President Bush has announced a new Medicare-endorsed prescription drug discount card program designed to immediately help Medicare beneficiaries lower their out-of-pocket drug costs.

President Bush has announced a new Medicare-endorsed prescription drug discount card program designed to immediately help Medicare beneficiaries lower their out-of-pocket drug costs.

HHS Secretary Tommy G. Thompson said the president's plan gives immediate help to people with Medicare by providing discounts on drugs while Congress and the administration work to design and implement Medicare coverage for prescription drugs.

"The new discount card program will give seniors greater power to purchase their prescription drugs at a discount," said Thompson. "It will especially help people with Medicare who currently have no prescription drug coverage by lowering the prices they pay for their medications."

Discount cards are expected to save Medicare beneficiaries some 10% to 25% on prescription drug prices. Medicare serves about 40 million beneficiaries, and over 10 million of them do not have prescription drug coverage in addition to their Medicare coverage. The discount program can be implemented quickly, without new legislation, while Congress and the administration work to add a drug benefit to the Medicare program.

Under the Medicare-Endorsed Rx Discount Program, people with Medicare will have the opportunity to learn about and join existing prescription drug discount card organizations. In turn, with larger memberships, the discount card organizations will be able to secure discounts for beneficiaries, just as large insurance plans do.

Easier access to information about the available discount card programs will give Medicare beneficiaries the opportunity to choose the card that best fits their prescription drug needs. A central feature of the discount card program will be the publication of comparative information, including drug prices available under each individual program.

"This program will give people with Medicare the same tools that others are already using to lower their prescription drug costs," Secretary Thompson said. "It is a constructive step that will give immediate relief to those who need it most, as we work to add a drug benefit to Medicare."

All Medicare beneficiaries will be able to enroll in one of several Medicare-endorsed discount card organizations. A small, one-time enrollment fee will be allowed, but it cannot exceed $25.

Community pharmacies file suit

The plan has come under fire from pharmacy associations that claim it unfairly benefits large pharmacy benefit managers. The National Community Pharmacists Association and the National Association of Chain Drug Stores filed a complaint against Secretary of Health and Human Services Tommy Thompson and Centers for Medicare and Medicaid Services Administrator Tom Scully regarding the administration's discount card initiative. The suit cites a lack of legislative authority on their part, violations of the Administrative Procedures Act and the Federal Advisory Committee Act, and an unlawful delegation of regulatory power to a private consortium.

"This plan provides false hopes to our seniors when they walk into their neighborhood pharmacy," said Craig Fuller, president and chief executive officer of NACDS. "The possibility exists that there are no real discounts on the drugs that their doctors prescribe, that their pharmacy does not participate in the plan, or that they must take a different type of medication than that which was prescribed by their doctor."

The complaint claims that:


•Â HHS set standards for the plan and anticipates spending several million dollars to implement it without Congressional authorization to do so. The law specifically states that in order for HHS to set standards and expend funds, they must have permission from Congress to do so.


•Â HHS set standards for the plan in an unlawful manner. By failing to follow the Administrative Procedures Act, HHS violated the procedure by which plans must be submitted and reviewed.


•Â The Federal Advisory Committee Act requires prior notice and open meetings when developing a government program. HHS met neither of these criteria during the development of the plan.


•Â By setting up the consortium to create, administer and enforce the standards, HHS delegates all power to a private company, which is unlawful.

Enrollment in the Medicare Rx Discount Card Program could begin as early as November 1. PR

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