Drug-Card Headaches

Published on

Los Angeles Times

Seniors eager to buy one of the prescription drug discount cards that will go on sale next month could get some help from a cost-comparison tool slated to debut later this month on the website http://www.medicare.gov

Designed by the small Los Angeles-based software company DestinationRx, the website will show how the cards’ discounts compare with average retail prices. It may shed some light on one of the most opaque practices in U.S. capitalism.

The cards, which for a fee of no more than $30 per year promise discounts up to 20% on some drugs, will inevitably generate confusion that no website can clear up.

The discount drug program, for starters, is so complex that a coalition of state health insurance plan directors recently estimated that it would take 2 1/2hours to fully explain it to one beneficiary.

Worse, the program seems designed to benefit drug card sponsors (that is, the private companies that will offer the cards, which will include insurers partnering with drug companies), at the expense of consumers. Sponsors can change the prices they charge for various medications and the list of drugs they wish to offer once a week, while consumers can buy only one card and are allowed to switch cards only once a year.

Thus a diligent consumer may compare savings — as many now do for telephone service — then purchase one company’s prescription card, only to discover that the company no longer covers the very drugs needed.

Congress’ sloppy design of the program is why consumers in more than half of U.S. states, including California, should be glad that their leaders are exploring other ways to push down prescription drug prices, including efforts to ease the reimportation of U.S.-made drugs from Canada.

In California, Assemblyman Dario Frommer (D-Los Feliz) has written two sensible bills. The first, AB 1957, would provide Californians with a website with links to certified Canadian pharmacies and would require the state to look for ways to ease drug importation; the second, AB 1958, would let the state collectively bargain with companies and HMOs for the best drug deals.

This is not to suggest that Medicare’s new website will be useless. It will be a genuine help if Medicare officials live up to their promise to show how each card’s discounts compare to the prices for specific drugs at retail pharmacies near a given ZIP code.

Medicare officials should also take a step they have so far resisted: create a simple index that lets consumers compare the savings of a given drug card with the discounted prices now paid by federal agencies such as the Department of Veterans Affairs.

The new Medicare website could steer seniors toward legitimate discounts. Even more usefully, it could stoke a greater awareness of the pricing inequities that cry out for reforms far more ambitious than a drug discount card.

Consumer Watchdog
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