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Some Generics 60 Percent Less
Medicare Chief Pleased With Savings Available with
Drug Cards
May 6, 2004 - The first analysis comparing the
Medicare-approved drug discount cards with the current prices for
prescription medicines shows savings of at least 10 to 17 percent for
brand name drugs and up to 60 percent for generic drugs, according to
the Centers for Medicare & Medicaid Services (CMS).
This study compared prices posted by the
Medicare-approved drug discount cards to the average prices paid by all
Americans, including Americans with access to lower drug prices through
public and private insurance plans, according to CMS.
"All along we expected that the Medicare-approved
discount cards would provide beneficiaries with discounts off retail
prices for brand-name prescription drugs," said HHS Secretary Tommy G.
Thompson. "And now, thanks to the new discounts available through the
Medicare-approved cards, we are seeing that seniors can now get
significantly better prices than people typically pay - including people
with public and private insurance."
The CMS said findings reported yesterday show that
the 10 to 17 percent savings for name brand drugs off national average
retail pharmacy prices (including those paid by people with private
insurance, Medicaid and cash-paying customers). In just one month, most
of these beneficiaries will save more than the maximum enrollment fee of
$30. Savings compared to the average prices paid by Americans for
generic drugs are even larger, ranging between 30 and 60 percent.
Savings from Medicare-approved discount cards that offer mail order
services are nearly 10 to 13 percent lower than certain Internet
pharmacies offering similar services. This analysis is based on the best
Medicare-approved discount card prices reported by card sponsors on the
Price Compare website using randomly selected zip codes to data on
national average retail pharmacy prices actually paid by Americans.
"Medicare beneficiaries are above average when it
comes to their drug needs, but from now on, they can be below average
when it comes to the drug prices they have to pay," said Dr. McClellan.
"The new drug card program not only means that beneficiaries are no
longer paying the highest prices in the drug store - it means they can
get significantly lower prices than are available to many people with
insurance coverage. And even greater savings are available to low-income
beneficiaries who qualify for the $600 credit this year and next plus
additional discounts from many drug manufacturers."
These actual prices paid reflect that Americans
with public and private insurance generally get significant discounts
off the "list" prices based on the Average Wholesale Price (AWP). Thus,
many Americans pay less than AWP for their drugs so that average retail
prices are typically less. The drug cards provide discounts of 15 to 20
percent or more off the Average Wholesale Price (AWP) for brand name
drugs, and far larger AWP discounts for generic drugs.
Larger AWP discounts are available on mail-order
drugs through the drug cards, and these discounts translate into even
lower actual prices for beneficiaries who prefer mail-order services.
For mail-order prescriptions, which are generally less expensive because
they are available less quickly, in higher volumes, and without
face-to-face help and advice from a pharmacist, the Medicare-approved
cards show savings between 9.9 percent and 12.9 percent compared to such
widely reported sources as drugstore.com and costco.com. Costco.com has
a $45 membership fee, compared to the annual enrollment fee of at most
$30 for Medicare-approved cards.
All Medicare beneficiaries, except those who have
outpatient drug coverage through Medicaid, can now enroll in a
Medicare-approved drug discount card program. Beneficiaries who enroll
by the end of May will be fully eligible for the discounts and financial
assistance beginning in June. The card sponsors may charge an annual
enrollment fee of no more than $30, though many cards have lower fees
and some have no fee. There is no enrollment fee on any card for people
who qualify for the $600 credit.
Beneficiaries can compare the prices of drugs
offered by the drug cards at www.medicare.gov or by calling
1-800-MEDICARE (1-800-633-4227) to help them compare the discounted
prices negotiated by the card sponsors, as well as the enrollment fees,
and other discount card features. They can also compare the prices of
drugs being charged at their local pharmacies and find out the cards the
pharmacies honor. The card sponsors provide the pricing and pharmacy
information to CMS and that information is being updated weekly.
Interest in the Medicare-approved drug discount
program has been high - on Monday, May 3, 1-800-MEDICARE received an all
time high of nearly 408,000 calls, almost 8 percent of the 5.9 million
calls received during all of 2003. More than 327,000 calls were received
on Tuesday, May 4. Traffic on www.medicare.gov has also been
high, more than 1.7 million page hits were received on Monday.
"The best times to call 1-800-MEDICARE is after 6
in the evening and before 9 in the morning," said Dr. McClellan.
"Thursdays and Fridays are the best days of the workweek to call and
Sunday is the best of the weekend days."
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