PREPARED BY THE CENTER FOR MEDICARE ADVOCACY, INC.

Transcription

1 MEDICARE DRUG CARDS PROVE INCONSISTENT AND PROVIDE FEW DISCOUNTS FOR MEDICARE BENEFICIARIES TRYING TO REDUCE THE COST OF THE TEN MOST POPULAR BRAND-NAME DRUGS USED BY SENIORS PREPARED BY THE CENTER FOR MEDICARE ADVOCACY, INC.

2 SUMMARY The Medicare Prescription Drug Improvement, and Modernization Act of 2003 [Public Law (Medicare Act)] created the Medicare prescription drug discount card program as a stop-gap measure to assist Medicare beneficiaries with their prescription drug costs from June 2004 through December 31, 2005, until the new Medicare drug benefit takes effect in According to the Centers for Medicare and Medicaid Services (CMS), these drug cards will provide elders and people with disabilities across the United States with significant discounts on prescription drugs. However, since its inception, the Medicare drug card program has been fraught with problems: pharmacies have been listed on the website as participating members of drug card plans when, in fact, they are not; people with Medicare have found the website confusing and additional CMS support unhelpful; drug prices posted on the Medicare.gov website proved to be inaccurate; and the cards have failed to reduce the cost of prescription drugs. 1 Today, the Center for Medicare Advocacy (the Center) is releasing a report regarding other deficiencies with the Medicare drug cards. This report analyzes the price savings that the Medicare drug cards offer seniors in Washington, D.C. (zip code 20009); Willimantic, Connecticut (zip code 06226); and Olney, Maryland (zip code 20832) for the ten most popular brand-name drugs used by seniors. 2 These drugs were included in the Pennsylvania Department of Aging, PACE Program, 2003 High Cost and High Volume Claims (February 2004) report and have been analyzed in studies prepared for CMS and Representative Benjamin L. Cardin (D-MD 3 rd ). FINDINGS 1 Letter to Tommy G. Thompson, Secretary of Health and Human Services, from Henry A. Waxman, Ranking Minority Member for Committee on Government Reform, and Louise McIntosh Slaughter, D-NY 28 th (July 6, 2004). 2 The dosage and quantity of each drug used were: Aricept, 10 mg, 30 tab; Celebrex, 200 mg, 30 cap; Fosamax, 70 mg, 4 tab; Lipitor, 10 mg, 30 tab; Nexium, 40 mg, 30 cpdr; Norvasc, 5 mg, 30 tab; Plavix, 75 mg, 30 tab; Prevacid, 30 mg, 30 cpdr; Zocor, 40 mg, 30 tab; Protonix, 40 mg, 30 tbec.

3 The report finds that the drug cards fail to provide Medicare beneficiaries with significant discounts on prescription drugs. Analysis shows that the Medicare drug cards are both confusing and inconsistent. Specifically, the report finds:! Discounts on prescription drugs vary by zip code and pharmacy. While a study conducted in Maryland s 3 rd Congressional District for Representative Benjamin L. Cardin finds that the prices available with the Medicare drug cards are considerably more expensive than the prices available from Drugstore.com, 3 a price comparison in Washington, D.C. (zip code 20009) using the same drugs finds that the Medicare drug cards do offer modest discounts on some prescription drugs in that zip code. A comparison of drug prices between Medicare.gov (using the Washington, D.C. zip code 20009) and Drugstore.com on July 26, 2004 found that the lowest-priced Medicare drug card offered on the Medicare.gov website provided lower prices for Norvasc, Prevacid, Nexium, Zocor, Protonix, Fosamax, Plavix, and Celebrex, compared to Drugstore.com.! Discounts vary by prescription. Even where the Center found that the Medicare drug discount cards offered better prices, the amount of the discount varied substantially. Please see Appendix A.! The cards fail to provide significant discounts on all prescription drugs. A comparison of drug prices between Medicare.gov (using the Washington, D.C. zip code 20009) and Drugstore.com on July 26, 2004 revealed that some drugs may even be more expensive when purchased with a Medicare drug card than when purchased at Drugstore.com. 3 House Committee on Government Reform, Medicare Drug Cards Provide Few Discounts in Maryland s 3 rd Congressional District (July 2004).

4 Table 1: Drug Prices Using Medicare Drug Cards Which Provide Greatest Discounts Compared to Drug Prices Using Drugstore.com Washington, D.C.; Willimantic, CT; Olney, MD Drug Prices (30 day supply) Lowest-Priced Medicare Drug Card Offered by Medicare.gov Drugstore.com % Discount Aricept $ $ % Lipitor $64.62 $ % Moreover, the price of a month s supply of Plavix at CVS Pharmacy in Washington, DC (zip code 20009) remained constant over ten weeks, stagnating at $ A month s supply of the same drug in Willimantic, Connecticut (zip code 06226) also remained unchanged from May 27, 2004 through July 19, 2004, costing $ In Olney, Maryland, the price of a month s supply of Plavix remained fairly constant using the U Share Prescription Drug Discount Card from May 27, 2004 through July 19, 2004, decreasing by only three cents from $ to $ in two months. Similarly, the price of a month s supply of Aricept remained unchanged from May 26, 2004 through July 19, 2004 at $ at CVS Pharmacy in Washington DC (zip code 20009) using the Public Sector Partners Prescription Drug Discount Card. 4 While CMS claims that the new drug discount cards have lowered the price of prescription medication by between 11 and 18 percent, our research finds such assertions misleading. As others have indicated, prices are in many cases no lower, and in some cases higher, than they were before the law passed. 5 Price comparisons reveal that the cost of drugs purchased with Medicare 4 Data collected by the Center for Medicare Advocacy show that the Medicare drug cards fail to reduce the cost of prescription drugs. Tracking the price of Plavix (75 mg, 30 tab) from May 7, 2004 through July 12, 2004, the Center records that the price of Plavix remained unchanged even after the Medicare drug cards went into effect on June 1, Similar findings exist for other drugs, including Aricept (10 mg, 30 tab). 5 AARP, 6/30/04.

5 drug cards remains higher than that of drugs purchased in Canada or through the Department of Veterans Affairs. 6! Medicare beneficiaries are locked into their discount card choice and can only switch drug card providers in November They are placed at the mercy of drug card providers to consistently offer the same medications on their plan. While some of the Medicare drug discount cards the Center looked at consistently offered the same medications, others suspended service for a week or more. For example, Prescription Discount Card, available June 18, 2004, was listed as unavailable on June 21, 2004 in Washington, D.C. (zip code 20009). Beneficiaries who subscribe to cards which present similar deficiencies may encounter difficulties in obtaining their medication through the Medicare drug discount card plan. METHODOLOGY The Center for Medicare Advocacy analyzed prices for the ten most popular brand-name drugs used by seniors to determine potential problems with the drug card initiative. 7 After identifying the cards which offered the greatest discount on medication for each zip code in the first week of data collection (May 7, 2004), the Center continued to monitor the drug prices for each of the selected cards to determine whether or not the cards provided significant discounts to beneficiaries once they took effect on June 1, The Center examined the price of drugs for only two cards because Medicare beneficiaries are locked into their choice of drug card and are prohibited from switching cards once they have enrolled in a drug card plan. Tracking the price of drugs over ten weeks, the Center looked to determine whether prices remained constant or decreased, as pharmaceutical companies claim. CONCLUSIONS 6 Families USA. Sticker Shock: Rising Prescription Drug Prices for Seniors. (June 2004). 7 The Center for Medicare Advocacy collected data on the ten most popular brand-name drugs used by seniors the same list of drugs examined by Representative Benjamin L. Cardin in Maryland s 3 rd Congressional District.

6 The Center s findings suggest that the Medicare drug cards are not an effective way to lower the cost of prescription drugs. Not only have the cards failed to reduce costs for all beneficiaries, they are confusing and often inconsistent. Data suggest that beneficiaries may confront weeks when their card temporarily does not offer the drug that their doctor has prescribed. While recent updates to the Medicare.gov website have eased beneficiaries ability to compare prices online, the complexity of choices offered may deter some beneficiaries from enrolling in a drug card plan. Studies have shown that, controlling for educational differences, seniors are more likely than nonelderly consumers to have trouble with comparative information to inform health plan choice. Conservative estimates suggest that 56 percent of the Medicare population has difficulty using comparative information. 8 Better coordination of the Medicare drug card program could increase the number of beneficiaries who enroll in these cards, creating wider access to Medicare drug benefits. If we are to believe that CMS administrator Mark McClellan was sincere when he asserted in his July 19, 2004 report that, the Administration is committed to ensuring that each eligible beneficiary has the opportunity to enroll in the drug card program that best meets his or her needs (emphasis added), 9 the Administration should consider implementing the following recommendations:! Provide for uniformity across the country. At present, the amount that beneficiaries save using a Medicare drug card depends upon where they live and what pharmacy they use. The Medicare drug discount program should offer the same prescription drug benefits to beneficiaries no matter where they live or where they shop.! Allow beneficiaries to switch cards, even if they are already enrolled in another Medicare drug discount card plan. CMS administrator, Mark McClellan, claimed in his testimony of July 19, 2004, that, beneficiaries will be using their market clout to drive prices down so that the dollars spent by them and by the government on their behalf will be able to provide more medications than before. 10 Yet the Center s data suggest that under current conditions, only miniscule price differences exist between drug cards 8 Judith H. Hibbard, Paul Slovic, Ellen Peters, Melissa L. Finucane, and Martin Tusler, Is the Informed-Choice Policy Approach Appropriate for Medicare Beneficiaries? Health Affairs (May/June 2001) p Testimony of Mark McClellan, MD, Ph.D., Administrator Centers for Medicare & Medicaid Services, on Medicare Drug Benefit s Impact on Low-Income Beneficiaries Before the Senate Committee on Aging (July 19, 2004) p Ibid, p. 1.

7 (most cards vary in their discounts on drugs by a few dollars). Little competition exists to drive down the price of drugs. Allowing beneficiaries the ability to switch to another card which offers their drug at a lower price would increase competition between Medicare drug discount card providers and lead to lower drug prices overall. While drug card enrollment fees, ranging from zero to 30 dollars, might deter some beneficiaries from taking advantage of this option, differences in some drug prices may prove significant enough for beneficiaries to switch cards.! Decrease the number of cards offered. The large number of cards currently offered has failed to decrease the price of prescription medication through free-market competition. Moreover, the wide range of options currently available is confusing and may deter elderly beneficiaries from enrolling in a drug discount card.! The Center finds that the new Medicare drug discount cards appear to offer inconsistent, if any, benefits to beneficiaries and looks forward to future improvements in efforts to reduce the cost of prescription drugs.

8 APPENDIX A Figure 1: Drug Prices Using Medicare Drug Cards Which Provide Greatest Discounts Compared to Drug Prices Using Drugstore.com Washington, D.C. Drug Prices (30 day supply) Lowest-Priced Medicare Drug Card Offered by Medicare.gov Drugstore.com % Discount Celebrex $74.14 $ % Fosamax $57.18 $ % Nexium $98.90 $ % Norvasc $41.54 $ % Plavix $ $ % Prevacid $ $ % Protonix $68.71 $ % Zocor $97.82 $ %

9 Figure 2: Drug Prices Using Medicare Drug Cards Which Provide Greatest Discounts Compared to Drug Prices Using Drugstore.com Willimantic, CT Drug Prices (30 day supply) Lowest-Priced Medicare Drug Card Offered by Medicare.gov Drugstore.com % Discount Celebrex $74.14 $ % Fosamax $57.18 $ % Nexium $ $ % Norvasc $41.54 $ % Plavix $ $ % Prevacid $ $ % Protonix $68.71 $ % Zocor $97.82 $ %

10 Figure 3: Drug Prices Using Medicare Drug Cards Which Provide Greatest Discounts Compared to Drug Prices Using Drugstore.com Olney, MD Lowest-Priced Drugstore.com % Discount Medicare Drug Card Offered by Medicare.gov Celebrex $74.14 $ % Fosamax $57.18 $ % Nexium $ $ % Norvasc $41.54 $ % Plavix $ $ % Prevacid $ $ % Protonix $68.71 $ % Zocor $97.82 $ % * Please note, however, that not all of the ten drugs surveyed were cheaper using the Medicare drug cards. The prices available with the Medicare drug cards were more expensive than the prices available from Drugstore.com for Lipitor and Aricept in Washington, D.C.; Willimantic, CT; and Olney, MD.