MEDICARE DRUG CARDS PROVE CONFUSING AND INCONSISTENT FOR SENIORS TRYING TO REDUCE THE COST OF MS DRUGS

Transcription

1 MEDICARE DRUG CARDS PROVE CONFUSING AND INCONSISTENT FOR SENIORS TRYING TO REDUCE THE COST OF MS DRUGS PREPARED BY THE CENTER FOR MEDICARE ADVOCACY, INC.

2 SUMMARY The Medicare 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 potential flaws with the prescription drug benefit in Washington, D.C. (zip code 20009); Willimantic, Connecticut (zip code 06226); Olney, Maryland (zip code 20832); Santa Ana, California (zip code 92705); West Palm Beach, Florida (zip code 33419); and Ithaca, New York (zip code 14850) for four common drugs used to treat multiple sclerosis. 2 The Center examined these drugs because it has many clients with MS and because MS drugs are expensive. FINDINGS 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) finds that the Medicare drug cards sometimes offer modest discounts on prescription drugs. On July 21, 2004, the lowest-priced Medicare drug card offered on the Medicare.gov website provided Betaseron (0.3 mg, 15 tab) at a discount for $1, ~ $1,289.40, compared to Drugstore.com, which offered Betaseron for $1,145.99, for a savings of about $100. On the same date, however, Drugstore.com offered Avonex (30 mcg, 5 kit) for $1,127.52, versus the lowest-priced Medicare drug card on the Medicare.gov website - $1, ~ $1, People enrolled in the discount card with the lowest price would save $38.14, or about three percent. 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: Betaseron, 0.3 mg, 16 solr; Copaxone, 20 mg, 30 solr; Avonex, 30 mcg/0.5 ml, 5 kit; Rebif, 44 mcg/0.5 ml, 12 soln. 3 House Committee on Government Reform, Medicare Drug Cards Provide Few Discounts in Maryland s 3 rd Congressional District (July 2004).

3 Medicare beneficiaries are locked into their discount card choice and can switch drug card providers in November They are placed at the mercy of drug card sponsors 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 medication, others suspended service for a week or more. For example, in the second week of our study, offered Rebif for $2, A week later, the card was listed as unavailable on the Medicare.gov website in all surveyed locations. Beneficiaries who subscribe to cards which present similar deficiencies may encounter difficulties in obtaining their medication through the Medicare drug discount card plan. The Medicare drug discount program rules prohibit card enrollees from taking advantage of significant discounts offered by other cards if they are already enrolled in another Medicare drug discount card plan. For example, the Preferred and the offered the lowest price for Avonex ($1,391.56) in Washington, DC (zip code 20009) during the first two weeks of our survey. In the third week, MedImpact and InStil Health Solutions drastically decreased the price of the drug by 30 dollars (2 percent), offering Avonex for $1, in the same location. Yet the rules prevented beneficiaries from obtaining the drug at the lower price. Some drugs remain largely unavailable and expensive. Initially, a few drug discount cards listed Copaxone on their plan. A month s supply of Copaxone cost $28, at the end of June in Washington, D.C. (zip code 20009) using the lowest-priced drug discount card ( Initiatives Discount Drug Card). As more cards began to offer the drug on their plan, the price of Copaxone increased. On July 26, 2004, a month s supply of Copaxone cost $33, using the lowest-priced drug discount card ( Powered by MedImpact). This 14 percent increase in the cost of Copaxone amounts to more than the average decrease in the price of other drugs. The increase disproves the theory that the availability of more cards will decrease the cost of medication through free-market competition. A more global concern is that beneficiaries may not be able to discern which card will provide the most dependable low cost for their medication before it is too late to switch cards. After a four week survey of prices for four MS medications, it remains unclear for most drugs examined which card would ultimately prove the most dependable and least expensive. Since the new prescription drug benefit is a temporary measure, beneficiaries may not be as well informed as they need to be about the card they are choosing before enrolling in the drug discount program. A curious facet of the new drug discount program is the lack of consistency or universality in the discounts offered by the cards. Beneficiaries may find significant discounts on drugs purchased pharmacies, but not at others. While (Option B) and AARP s consistently offer Betaseron for the lowest price at all drug stores surveyed, other cards offer other drugs for the lowest price at specific pharmacies. This may inconvenience some beneficiaries who rely on a specific drug store for their pharmaceutical needs. One question raised by this finding is whether pharmacies are responsible for the lower price or whether connections between certain pharmacies and drug discount card companies reduce the cost of drugs locations.

4 METHODOLOGY The Center for Medicare Advocacy analyzed prices for four common MS medications to determine potential problems with the drug card initiative. The Center looked at these drugs in particular because the Center has many clients with MS and these drugs are very expensive. Tracking the price of these drugs over four weeks (late June to late July), the Center looked to determine whether or not the cards consistently offered the lowest price or if there was significant fluctuation. Inputting the list of drugs for each of the zip codes surveyed on the Medicare.gov website, the Center examined the price of the drugs for each of the cards available each week to determine which card offered the lowest price for each drug. Analyzing the data, the Center looked for potential problems and inconsistencies which might occur based upon the findings. A more complete account of the Center s findings is detailed in Appendix A, Table 1. CONCLUSIONS The Center s findings suggest that the Medicare drug cards are not an effective way to lower the cost of prescription drugs. Not have the cards failed to reduce beneficiaries costs, 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. 4 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), 5 the Administration should consider implementing the following recommendations: 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. 6 Yet the Center s data suggest that under current conditions, miniscule price differences exist between drug cards (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 4 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.

5 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 few, if any, benefits to beneficiaries and looks forward to future improvements in efforts to reduce the cost of prescription drugs.

6 APPENDIX A Table 1 PRICE OF MS DRUGS USING LOWEST-PRICED DRUG CARD AVAILABLE, JUNE/JULY 2004 Zip Code: Washington, D.C. Betaseron Copaxone Avonex Rebif D7001 [$1,328.37] at Statscript Pharmacy [Pharmacy Care Alliance (Option B) and AARP Discount Card do not offer Betaseron this week] Initiatives Initiatives D7083 [$28,913.21] Initiatives D7001 [$33,500.56] at Statscript Pharmacy Preferred D7041/ D7042 [$1,391.56] at CVS Pharmacy Preferred D7041/ D7042 [$1,391.56] at CVS Pharmacy at Statscript Pharmacy at Statscript Pharmacy (InStil Health Solutions at Statscript Pharmacy at Statscript Pharmacy PrecisionDiscounts [$2,433.58] at Statscript Pharmacy (Sav-Rx Med- at Statscript Pharmacy

7 Zip Code: Willimantic, CT Betaseron Copaxone Avonex Rebif D7001 [$1,328.37] pharmacies [Pharmacy Care Alliance (Option B) and AARP do not offer Betaseron this week] Initiatives Drug Card - D7083 [$28,913.21] Initiatives D7083 [$28,578.40] at Wal-Mart Pharmacy Initiatives D7083 [$28,578.40] at Wal-Mart Pharmacy American Plan - D7080/RxSavings Reader's Digest - D7029/RxSavings - D7049/BD Drug D7096 [$33,499.31] at Stop and Shop Pharmacy American -Med - D7079/Sav-Rx Med- D7088/ArgusRx - D7047 [$1,391.28] Initiatives Discount Drug Card - D7083 [$1,373.31] at Wal- Mart Pharmacy at Shaws Pharmacy and Stop and Shop Pharmacy pharmacies (InStil Health Solutions everywhere except CVS Pharmacy everywhere except CVS Pharmacy PrecisionDiscounts [$2,433.58] at Stop and Shop Pharmacy (Sav-Rx Med- everywhere except CVS Pharmacy

8 Zip Code: Olney, MD Betaseron Copaxone Avonex Rebif D7074 [$1,219.60/$1,219.70] D7074 [$1,219.60/$1,219.70] D7001 [$1,328.37] pharmacies [Pharmacy Care Alliance (Option B) and AARP Discount Card do not offer Betaseron this week] Initiatives Initiatives Initiatives Advantra X-tra Drug Program - D7095/BD Drug D7096/RxSavings - D7049/RxSavings Mennonite Mutual Aid Association/RxSavings Reader's Digest - D7029/American Plan - D7080 [$33,499.31] at Giant Pharmacy Preferred D7041/ D7042 [$1,391.53] at Giant and Olney Professional pharmacies ArgusRx - D7047 [$1,391.28] at Olney Professional Pharmacy Inc. and Shoppers Pharmacy at Giant and Shoppers Pharmacies pharmacies (InStil Health Solutions Community Care Rx - D7090/Criterion - D7091 [$2,450.87] at Giant Pharmacy PrecisionDisocunts [$2,433.58] at Shoppers and Giant Pharmacies ( pharmacies

9 Zip Code: Santa Ana, CA Betaseron Copaxone Avonex Rebif D7001 [$1,328.37] at Santa Ana Tustin Clinic Pharmacy [ (Option B) and AARP do not offer Betaseron this week] Initiatives D7083 [$28,910.71] at Walgreen Drug Store Initiatives D7083 [$28,910.71] at Walgreen Drug Store Initiatives D7083 [$28,910.71] at Walgreen Drug Store BD Drug D7096/RxSavings - D7049/RxSavings Mennonite Mutual Aid Association - D7068/RxSavings Reader's Digest - D7029/American Plan - D7080 [$33,499.31] at Target Initiatives Discount Drug Card - D7083 [$1,389.28] at Walgreen Drug Store /Sav-Rx Med- D7088, American -Med - D7079, ArgusRx - D7047 [$1,391.28] ScriptSave Premier - D7021/Aetna Rx savings Card (SM) - D7028 [$1,385.05] at Safescript Pharmacy at Santa Ana Tustin Clinic Pharmacy at Santa Ana Tustin Clinic Pharmacy (InStil Health Solutions pharmacies PrecisionDiscounts [$2,449.64] at Home and Plaza Pharmacies (

10 Zip Code: West Palm Beach, FL Betaseron Copaxone Avonex Rebif, [$1,218.95] at COSTCO pharmacy (Option B) - D7073 [$1,218.95] at Costco Pharmacy, [$1,219.70] everywhere else/aarp (Option B) - D7073 [$1,218.95] at Costco Pharmacy, [$1,219.70] everywhere else/aarp D7001 [$1,328.37] pharmacies [Pharmacy Care Alliance (Option B) and AARP Discount Card do not offer Betaseron this week] Initiatives D7083 [$28,578.40] at SAMS Pharmacy, [$28,910.71] at other Initiatives D7083 [$28,578.40] at SAMS Pharmacy, [$28,910.71] at other Initiatives D7083 [$28,578.40] at SAMS Pharmacy Advantra X-tra Drug Program - D7095/BD Drug D7096/RxSavings - D7049/RxSavings Mennonite Mutual Aid Association - D7068/RxSavings Reader's Digest - D7029/American Plan - D7080 [$33,499.31] at Initiatives Drug Card - D7083 [$1,373.31] at SAMS Pharmacy, [$1,389.28] at other select pharmacies ScriptSave Premier - D7021/Aetna Rx savings Card (SM) - D7028/BlueSaver Premier - D7043 [$1,385.05] at pharmacies pharmacies (Instil Health Solutions PrecisionDiscounts [$2,433.58] at (

11 Zip Code: Ithaca, NY Betaseron Copaxone Avonex Rebif D7001 [$1,328.37] pharmacies [Pharmacy Care Alliance (Option B) and AARP Discount Card do not offer Betaseron this week] Initiatives Initiatives Initiatives BD Drug D7096/RxSavings Fidelis Care New York - D7062/RxSavings Mennonite Mutual Aid Association - D7068/RxSavings - D7049/RxSavings Reader's Digest - D7029/American Plan - D7080 [$33,499.31] at ScriptSave Premier - D7021/Aetna Rx savings Card (SM) - D7028 [$1,385.05] at K Mart Pharmacy ScriptSave Premier - D7021/Aetma Rx savings Card (SM) - D7028 [$1, at pharmacies pharmacies (Instil Health Solutions at Wegmans Pharmacy everywhere except CVS Pharmacy PrecisionDiscounts [$2,433.58] at ( everywhere except CVS Pharmacy