Rx Watchdog Report Shining a light on the cost and quality of prescription drugs

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1 Rx Watchdog Report Shining a light on the cost and quality of prescription drugs Can t Afford Your Drugs? There May Be Some Help for You These are tough times for consumers trying to get assistance paying for prescription drugs. Buffeted by the bad economy, employers have slashed insurance coverage for millions of Americans. State governments are reducing services in order to try to balance their budgets. Meanwhile, even as wages stagnate and unemployment hovers at 10 percent, the cost of brand-name prescription drugs and health care insurance continues to rise rapidly. And at the time of this writing, Congress is still unclear about their plans for health care reform. So is there any hope for consumers who are having problems paying for their prescription medicines? While AARP continues to work hard to make sure all Americans have access to health care coverage that includes a meaningful prescription drug benefit, there are some programs available that help fill some of the gaps, for some individuals. This article provides an overview of how some of these programs private and public operate, with an emphasis on Prescription Assistance Programs (PAPs). It also provides consumers with information about how to access these programs. Manufacturer-Run Prescription Assistance Programs Pharmaceutical companies usually have one or more Prescription Assistance Programs, also known as Patient Assistance Programs that offer free or low cost prescription drugs primarily to people without health insurance. The drugs donated are almost always brand-name medicines, made by the sponsoring company. PAPs provide a valuable resource for millions of Americans, providing them with free or low cost prescription drugs that they would not otherwise be able to access. AARP s analysis of these programs found that while most PAPs offer tangible assistance, there are aspects of PAPs that limit their usefulness. Each PAP, even within the same manufacturer, has its own set of eligibility criteria, even sometimes ranging from drug to drug. Many PAPs still have a burdensome application process, and there is a lack of transparency about eligibility and how many people they served with medicines. Additionally, PAPs are not transparent about how much of a tax deduction they receive for their charitable contributions. Eligibility PAPs are aimed generally to help people whose income falls around 200 percent of Federal Poverty Level (FPL). For an individual, 200 percent of FPL is $21,660 (FPL 2009/2010 guidelines can be found at gov/medicaideligibility/downloads/ POV10Combo.pdf. Because PAPs are private entities and not regulated, the income and eligibility requirements vary greatly from one PAP to the next. It is not uncommon for a single manufacturer to have different income eligibility thresholds for different drugs. Additionally, some PAPs allow for exceptions, or rule on a case-by-case basis. Some have asset tests, but most don t. Most require that an applicant not have any form of health coverage, but some do allow for it, in certain instances. The substantial variation between each individual program presents some challenges for consumers and providers who attempt to get accurate information before entering into the application process. March State Advocacy Update 3 State Pharmaceutical Assistance Programs 4 Legal Front News 5 Resources The Pharmacist Knows Another route for consumers before going seeking assistance to any of the public or private programs is to speak with a pharmacist about your options, says Tom Clark, RPh., director of Clinical Affairs of the American Society of Consultant Pharmacists. Your pharmacist is quite knowledgeable about different strategies and ways you may be able to lower your prescription drug costs. Going over your list of medications, making sure there is no duplication, and seeing if there are generic alternatives are just a few of the ways we can help, said Clark. Not all pharmacists have the time these days, admitted Clark, to spend consulting with patients, due to reimbursement issues. But Clark encourages patients to try as all pharmacists are very knowledgeable and want to help. Your pharmacist is quite knowledgeable about different strategies and ways you may be able to lower your prescription drug costs. Clark also cautions patients who use multiple pharmacies, including mail order. They may use a Target, Walgreens or Walmart for a generic, for example, at very inexpensive rates, and then use a local pharmacy nearby for new or brand-name prescriptions. One danger of this approach, especially when patients use multiple physicians or prescribers is that a duplicate medication or drug interaction may not be caught by the pharmacy because of the incomplete records on the patient. continued on page 6 continued on page 4 1

2 State Advocacy Update States are continuing to face dramatic fiscal pressures as revenues decline and the demand for state-funded services continue to rise. AARP s state offices are combating the short-sighted efforts to reduce or eliminate State Pharmaceutical Assistance Programs (SPAPs). While these dollars can be cut without sacrificing federal funds, this risks incurring the much higher cost of treating unmanaged chronic conditions. AARP Connecticut is advocating that the $66 million in savings that will result from the federal government s decision to apply the American Recovery and Reinvestment Act increased Federal Medical Assistance Percentages (FMAP) to Medicare Part D clawback payment is used to help vulnerable, older residents struggling with prescription drug costs. Specifically, AARP Connecticut is asking legislators to restore the coverage of nonformulary drugs for people on ConnPace and those who are dualeligible (Medicaid/Medicare). Massachusetts SPAP, Prescription Advantage has seen significant reductions over the past few years. In the middle of this fiscal year, emergency state budget reductions resulted in more than 40,000 seniors and younger persons with disabilities getting less help from the program. The program will now mainly provide assistance with prescription co-payments when an enrollee falls into the Medicare coverage gap, or doughnut hole. Changes to the SPAP in Massachusetts as of January 1, 2010, included: Providing co-payment assistance only when a member enters the Medicare doughnut hole (for those with incomes between $16,245 and $32,490). Requiring an annual fee of $200 for members with an annual income between $32,491 and $54,150. These members must also incur out-of-pocket cost of $3250 before qualifying for copayment assistance. We question both the wisdom and the compassion of the $5.6 million cut to Prescription Advantage. The program is a lifeline for thousands of older adults who are struggling to afford their medications, said Deborah Banda, AARP Massachusetts State Director. AARP Massachusetts is urging the legislature to use the unexpected clawback relief from the federal government to restore funding to the program by using some of this windfall. States are continuing to face dramatic fiscal pressures as revenues decline and the demand for state-funded services continue to rise. South Carolina s SPAP, called Gap Assistance Program for Seniors (GAPS) was reduced from 95 percent coverage of the doughnut hole for lower income individuals to 10 percent in AARP South Carolina was able to advocate successfully and restore some of the funding so this year it is back up to 40 percent coverage of the doughnut hole. Washington state s Medicare Part D Co-pay Program is threatened by budget cuts that helps over 85,000 very lowincome older adults those who are dual-eligible for both Medicare and Medicare as well as younger people with disabilities. Many individuals in this program take 8 to 10 or more prescriptions at one time, and a typical person in this population is receiving less than $700 per month, living on Social Security Income. The state s co-payment program allows the eligible enrollees to pay a subsidized co-payment of $1.10 to $2.40 for a generic and $3.10 to $5.60 for a brandname drug. An additional $25 to $50 per month for prescription drugs will force many to make difficult trade-offs between filling a prescription or buying other necessities like food or gas, said Ingrid McDonald, AARP Washington associate state director for advocacy. New York The governor has proposed $39.3 million in reductions to the Medicaid pharmacy and NY s SPAP, called Elderly Pharmaceutical Insurance Coverage (EPIC), by eliminating the programs safety net feature that is commonly referred to as the wrap around. The EPIC wrap currently covers EPIC enrollees drugs that Medicare Part D will not pay for. The Medicaid wrap covers HIV/AIDS drugs, anti-rejection drugs, anti-psychotics or anti-depressants that a Medicare Part D plan will not cover for the Medicaid s dual-eligible population. The average EPIC enrollee is 78-yearsold and on four prescriptions. EPIC alone currently provides coverage to over 320,000 low- to middle-income older adults. AARP New York opposes changes to the wrap for both Medicaid and EPIC. No senior should leave the pharmacy counter without his or her prescription drugs, said David McNally, AARP New York s Advocacy Director. AARP New York, while opposing the above reductions, is pleased to see that the governor did not eliminate Epic s coverage when an individual falls into Medicare s coverage gap, or doughnut hole. n 2

3 State Pharmaceutical Assistance Programs Another vital component of the safety net for helping low-income consumers access prescription drugs are the State Pharmaceutical Assistance Programs (SPAPs). SPAPs differ from PAPs in that they are publicly funded and are accountable to state laws. All SPAPs have standards they must meet and be accountable for, including consumer protections, data collection, appeals processes and more. State Pharmaceutical Assistance: Subsidy Programs Twenty-three states, the Virgin Islands and three other states with specially designed programs have SPAPs that offer prescription drug subsidies to low-income Medicare beneficiaries as way of wrapping around the Medicare Part D benefit. Some of those benefits include providing financial assistance to enrollees with the Part D premiums, co-payments and annual deductibles, coverage while in the doughnut hole and coverage of drugs that Part D will not cover. Eligibility Because SPAPs are state-specific, the eligibility, the complexity of the application and the ease of the enrollment process and transparency of eligibility information varies state by state. Generally speaking, a SPAP enrollee must reside in the state where the SPAP is being offered. SPAP applicants usually must be 65 and older or be between 55 and 64 years old if disabled and receiving Social Security Disability Income. The income limit falls between an approximate ranges of 135 percent to 240 percent of FPL. There is usually no asset test. There are variables. For example, the Massachusetts SPAP helps pay the costs for Part D enrollees who are eligible up to 500 percent of poverty. They also help residents who are not Medicare beneficiaries; for this group there are no income limits but they do depending upon gross household income pay deductibles and co-payments, with some members only paying co-payments. And Hawaii for those disabled residents under 65, the gross annual income must be no greater than 188 percent of the FPL. Because SPAPs are statespecific, the eligibility, the complexity of the application and the ease of the enrollment process and transparency of eligibility information varies state by state. On the other end of the spectrum, South Carolina s SPAP requires all residents be enrolled in the SPAP s participating Prescription Drug Program, be 65 or Puerto Rico Virgin Islands Data as of March 2010 Complied by National Conference of State Legistlatures, Health Program, Denver, Colorado. Operational SPAP subsidy programs Limited or disease-specific subsidy programs older, and have an income between 100 to 200 percent of FPL. Both Massachusetts and South Carolina s SPAPs are being threatened by budget reductions this legislative session (for more information see State Advocacy). This time last year Rx Watchdog published Pay Now or Pay A Lot More Later, which discussed the importance of SPAPs and how it saves precious states dollars if they DON T reduce their funding of their SPAPs. To read this March 2009 issue visit rx_watchdog For more information on all states SPAPs visit the National Conference of State Legislatures at aspx?tabid=14334 n 3

4 The Pharmacist Knows continued If a patient uses multiple pharmacies, it is even more important to have a senior care pharmacist or their primary care physician be aware of all the medicines they are taking and review new prescriptions before the patient begins taking them, Clark said. A senior care pharmacist is a pharmacist specially trained in geriatric pharmacotherapy. Seniors particularly need the advice of a senior care pharmacist, because they often take five to eight to ten multiple medications, and their reactions and interactions to medicines are very different from a younger adult, Clark said. For a fee, an older adult can consult with a senior care pharmacist. See the Resources section for information. One of the best ways to track your medications is for the consumer to keep a medications list, or personal medication record (PMR). The PMR will help a consumer list all the medicines, including prescription and over-the-counter drugs and dietary supplements that they take, the doses, and how they are taken. They may download a copy or make an online record at In many cases, just shopping around for a better price will save you just as much money; and requesting a generic versus a brand-name prescription drug, if available, will most times save you money as well. Co-payment Foundations Many disease-specific organizations have foundations set up for patients to receive assistance with co-payments for insurance. They also provide disease-specific information and how to get assistance with filing claims and applications for insurance coverage, Social Security Disability and other public and private programs. Worth noting is that many of these foundations receive funding from the pharmaceutical companies. Most have limits on their spending per drug, and the range varies from a few hundred dollars in grants to tens of thousands of dollars, particularly for some high-priced cancer drugs. Eligibility, the application process, and transparency of information varies so greatly it is best to view the specific foundation s website or call one of the clearinghouses listed at the end of this article to receive the most current and accurate information. Pharmaceutical Discount Cards Almost all large retail stores, online stores and some pharmacies offer savings on prescription drugs if you get their discount card. However, accord- continued on page 5 Legal Front News Vytorin/Zetia Consumer Settlement The class action lawsuit was filed in January 2008, with PAL members Teamsterscare/ Local 25 Health Fund (MA) and Pipefitters Local 537 (MA) joining the suit in September The suit alleged that drug manufacturers Merck and Shering-Plough conspired to defraud consumers and health plans by preventing the release of their own scientific study (called the ENHANCE study) for two years, because it contradicted their widely advertised claims regarding their drug Zetia (also sold as Vytorin in a combination with another cholesterol-lowering drug.) The manufacturer s withheld their results because the study showed that Zetia/Vytorin was no more effective than a widely used generic drug (simvistatin). This contradicted their widespread TV advertising and other promotional activities claiming that their drug was better than simply taking a generic cholesterol-lowering statin drug alone. These manufacturers also paid $5.4 million to settle claims by the attorneys general of 35 different states and the District of Columbia regarding these and other alleged unfair and deceptive practices. If you are a consumer who paid for some or the entire purchase price for Vytorin or Zetia between Nov. 1, 2002, and September 17, 2009, you are eligible to file a claim. Consumers will share in $12.5 million in funds (after the court allocates some amount for legal costs and attorney fees). Additional information about this lawsuit and how to file a claim can be found by visiting Prescription Access Litigation s (PAL) website, filed under settlements at or at The deadline to file a claim is April 1, The above information is from Prescription Access Litigation (PAL), a nonprofit initiative working to make prescription drug prices more affordable for consumers, using class action litigation and public education. PAL is a project of Community Catalyst, a national nonprofit advocacy organization building consumer and community leadership to transform the American health care system. n 4

5 The Pharmacist Knows continued ing to Consumer Reports Best Buy Drugs Shopper s Guide to Prescription Drugs Number 5 Assistance Programs some cards aim, in part, to get people to purchase expensive brand-name medicines, and a consumer may only save 10 to 20 percent off the cost at a participating pharmacy. In many cases, just shopping around for a better price will save you just as much money; and asking for the generic form of the drug will most times save you money as well, and it is just as safe and effective as the brand-name drug. Many of the PAPs websites and resources listed at the end of this article list both PAPs and discount card programs. The eligibility, like a PAP, varies greatly. Also, steer clear of offers that come in the mail promoting drug discount cards. Attorneys general in a number of states have shut down groups for deceptive marketing of these cards. The problematic promotions sound like a very good deal and often look like they came from a government agency; but once the deceptive group collects the money the purchasers, they find that there are no pharmacies that accept the cards and they can t get a refund. Pharmacy Discounts Many retail chains have pharmacy programs with low-cost 30-day and 90-day supplies of the most commonly prescribed generic drugs. Again, it pays to shop around carefully and explore alternatives to highpriced prescription drugs. Retail store programs include: Target: $4 for 30-day supply/$10 for 90-day supply Walmart: $4 for 30-day supply/$10 for 90-day supply/walmart $4 Prescriptions Program Walgreens: $12 for a $90-day supply, plus a $20 annual enrollment fee or a $35 fee for a family CVS: $9.99 for a 90-day supply, plus a $10 enrollment fee Conclusion PAPs, SPAPs, Co-payment Foundations, prescription discount cards and similar discount programs all have a vital role in helping to fill the gaps for those who lack quality prescription drug coverage. Most of these programs are the payor of last resort, and their limitations can affect their usefulness of their benefit. Some improvements have been made; others still need to take place to effectively help more consumers gain access to medicines. It is clear these programs will never replace a comprehensive prescription drug benefit, and they are just a band-aid until such a benefit becomes a reality for all Americans. But for some of the people who are struggling to afford their prescription drugs, the programs offer some means however limited in providing help. Below are lists of available resources where a consumer can get information and help about the programs discussed in this article. n Resources National Conference of State Legislatures (NCSL) StatePharmaceuticalAssistancePrograms NCSL200/ tabid/14334/default.aspx Information on SPAP s TogetherRx Access A discount card for eligible applicants NeedyMeds A clearinghouse that offers a wide range of information, including discount cards, PAPs, state programs and disease-specific PAP programs. Partnership for Prescription Assistance A single point of entry to more than 475 public and private assistance programs, including 180 programs offered by pharmaceutical companies. Includes both discount programs and PAPs. Consumer can type in their needed prescription drugs, household information and zip code and the program will bring up what programs the applicant may be eligible for and more information about the program. arxassist A nonprofit organization and comprehensive website that offers a lists of PAPs, discount programs and much more. Information tailored to providers and consumers on medication access, including fact sheets, FAQs, and how to guides in getting help paying for prescription drugs. Patient Advocate Foundation A patient advocacy foundation that offers financial assistance to eligible applicants for a variety of specific diseases and diagnosis. Senior Care Pharmacist.com This website helps a consumer find a senior care pharmacist a pharmacist that is specially trained in geriatric pharmacotherapy and who provides one-on-one consultation with you and your family, often in your home or an office, for a fee. 5

6 Can t Afford Your Drugs? There May Be Some Help For You continued 6 For example, income eligibility for PAPs offered by Sanofi Adventis range from 250 percent to 500 percent of FPL. Sanofi Aventis requires that applicants have no existing prescription drug coverage. Eli Lilly recently raised their income threshold from 200 to 300 percent of FPL in August of We did this because of the number of calls coming in for help and our customers, said Janice Chavers, Communication Consultant. People are losing their jobs and it is the right thing to do. Eli Lilly s PAPs vary regarding insurance and uninsured applicant eligibility. And one of Bristol-Myers Squibb s PAP, called Destination Access, allows applicants to have an annual income limit of $75,000. The key word when reviewing different PAPs and their eligibility and income criteria is variable. Bristol-Myers Squibb also allows some applicants to be insured if they received a letter of denial from their health insurance (Letter Two appeals) and/or have reached the maximum level of denied appeals. The substantial variation between each individual program presents some challenges for consumers and providers who attempt to get accurate information before entering into the application process. Medicare Beneficiaries and Eligibility for PAPs Before a Medicare beneficiary seeks private assistance, consumers should make sure they are enrolled in a Medicare prescription drug plan that offers them the best coverage. To learn more about Medicare prescription drug coverage and plans, visit AARP s new interactive tool, Medicare Interactive (MI), is another helpful site and can be accessed by going to www. aarp.org/medicareinteractive. Medicare Part D enrollees are responsible for 100 percent of their drug costs while they are in the coverage cap, known as the doughnut hole. Many consumers look for ways to avoid the doughnut hole (see accompanying article on AARP s Doughnut Hole Calculator) or find ways to still afford to take their medications while in the doughnut hole. Some look to PAPs for help. However, not all PAPs offer assistance to Medicare Part D enrollees. The Department of Health and Human Services Office of Inspector General (HHS OIG) in 2006 provided guidance to manufacturer s running PAPs that allows manufacturers to provide assistance to beneficiaries in the Part D coverage gap; however, the contributions made through the PAP will not count towards the patient s out-of-pocket costs. As a result, manufacturers may assume the cost of the patient s drugs for the remainder of the year, and patients may not reach the defined catastrophic limit. After the OIG provided clarity to manufacturers, many decided to offer coverage to Medicare Part D enrollees. For the PAPs that offer assistance to Medicare Part D beneficiaries, they have different eligibility requirements. For example, AZ&Me the name for the combination of PAPs from manufacturer AstraZeneca offers assistance to Medicare Part D beneficiaries. An applicant is eligible if his or her annual income is at or below $30,000, or for a couple, $40,000. Also, the household must have spent at least 3 percent of their annual household income, out of pocket, on prescription drug costs. AZ&Me, in 2010, changed its Medicare PAP from a retail pharmacy-based program where previously patients paid between $15 to $25 for a co-payment to a mail order program where patients now receive their drugs at home for free. Eli Lilly s program, called LillyMedicare Answers, assists those Part D beneficiaries who are below 300 percent of FPL; they must also provide proof of low-income subsidy denial and not be eligible for both Medicaid and Medicare (dual-eligible). One of GlaxoSmithKline s PAPs, called Commitment to Access, offers assistance to beneficiaries, for certain drugs, mostly oncology and specialty drugs, to those who have spent $600 on prescriptions annually and have an annual income of $54,150 for an individual and $110,249 for a family of four. However, not all PAPs offer coverage to Medicare Part D enrollees. For example, Pfizer, who has eight PAPS, does not offer any benefit to Medicare Part D beneficiaries, nor does Amgen and some of the pharmaceutical manufacturer s PAPs. The Application Process Simply applying to a PAP for even one drug alone can be a significant challenge faced by both the consumer and the provider. The complexity involved is difficult for consumers who have a low literacy level; sometimes it is an even greater burden on physicians and their staff who often have to complete much of the applications themselves. Some PAPs require additional paperwork for a 3- or a 6-month supply and refills. Many PAPs have streamlined their application process and much of the application can be done online, and with the assistance of a PAP customer service representative over the phone. As with the eligibility criteria the quality of the customer assistance, the consumer-friendliness of the application and the number of times a physician needs to review or sign forms and the number of times a patient needs to re-apply vary with each PAP. Many PAPs offer Spanish-speaking representatives as well. continued on last page

7 Can t Afford Your Drugs? There May Be Some Help For You continued Several PAPs outsource their customer care services and toll-free numbers. There are also stand-alone companies that charge consumers a fee to help them process their applications for different PAPs. (Please see the Resources section on page 5 for more information on websites that assist consumers with the process of finding out about their eligibility and application process) But another troubling kind of transparency lacking involves tax reporting. Manufacturers PAPs entitles them to tax deductions for charitable contributions, and while some are better than others, few disclose full financial details about their programs. They are required to disclose the value of their drug donations annually to the Internal Revenue Service (IRS) on 990 forms that are publically available. However, the IRS doesn t require the companies to disclose how many people received the drugs and few companies voluntarily disclose that information. On their 990 forms, PAPs could be citing aggregate contributions based on Average Wholesale Price (AWP), Wholesale Acquisition Costs (WAC) or cost of goods (COG) variations that could widely skew the estimated value of the donations. Welvista A Different Model While not a traditional PAP, Welvista, a South Carolina based nonprofit organization, serves low-income uninsured people in all 46 counties in the state who need access to prescription medication. Welvista partners with 12 pharmaceutical companies who donate the medications to dispense to the uninsured. However, one significant difference and advantage to consumers is they only have to complete one standard application, and the patient can access medication from all 12 manufacturers. The completed and consumer-friendly application is current for 12 months with no additional paperwork required. Providers also enjoy the benefit of just being able to fax their patient s prescriptions into Welvista. Orders are filled from their mail-order pharmacy for a 3-month supply, and patients can speak directly to a pharmacist if they have questions. Welvista is based on the medical home model a comprehensive primary care health care delivery system that positions the provider at the center of patient care so they go beyond just distributing free medications. They conduct extensive outreach and are strategically placed in hospitals and clinics around the state to educate the consumer about the need to take their medications and how Welvista can help. They enroll the patients on-site. They also manage five pediatric dental clinics that provide children from low-income families with dental care and oral health care education. Welvista is also expanding their medication assistance program pilots in Texas, New Jersey, and Delaware. We work with the hospital social workers and case managers to get the patients enrolled in Welvista allowing the patient to leave with their medication when discharged. This is extremely effective and our outcomes show it, he added. When we got started in 1993 we quickly learned that due to the prevalence of chronic disease in our state that getting the patients to the doctor wasn t enough, we needed to help people access their prescription medication. The rest is history, said Chief Executive Officer Ken Trogdon. To qualify for Welvista s medication assistance program, a person must have a household income of at or below 200 percent of the federal poverty level, must be under the age of 65, and be uninsured. They do not accept Medicare beneficiaries, even if the beneficiaries do not have prescription coverage, and there is a $20 application fee. Once a person is approved for the program they can receive medication from the Welvista formulary for one full year at no cost. For more information visit their website at n Rx Watchdog Report 2009 AARP Reprinting with permission only Managing Editor David Gross Editor Donna DeLeno Neuworth 601 E Street NW, Washington, DC OUR-AARP AARP.org/watchdog