New Prescription Drug Program Drawing Fire

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CONFLICT: City Criticizes Chamber of Commerce’s Effort, Saying It Is Misleading.

The Los Angeles Area Chamber of Commerce has launched a new prescription drug discount program that has sparked complaints from a similar city-run effort that the chamber is misleading residents by copying the city program but offering lower benefits.

The city program, launched in August, goes by the name of LARx, while the chamber’s, announced in November, is called Los Angeles Rx.

The firm working for the city criticized the chamber for coming up with a program that seems so similar yet offers very different benefits.

“We think what they are doing is despicable,” said Sean Morrison of Envision. “They are just trying to confuse the consumers and not offer as big a discount as we get.”

David Eads, the chief operating officer of the chamber, dismissed the accusation and said the chamber’s plans had been in the works for more than a year and are modeled after similar efforts in other cities by other chambers of commerce.

“To be honest, we didn’t even know of the city’s program until it was announced,” Eads said. “At that point, it was too late for us to change. Besides, we believe with 9 million people living in the Los Angeles area, there is plenty of room for competition.”

Both programs are free for any resident of Los Angeles County and promise substantial discounts on prescriptions drugs to participants.

The chamber program is operated by the United Network of America company and promises discounts of 25-30 percent as well as savings on a variety of other medical services.

The city program promises discounts of anywhere between 5 to 42 percent on most drugs.

Mayor Antonio Villaraigosa, who began working on the city program nearly six years ago when he was on the City Council, unveiled his effort in late August. More than 100,000 cards and fliers have been sent to Department of Water and Power customers, seniors at local community centers and attendees of other various local city and county events such as flu clinics.

Morrison said company officials believe residents have saved more than $100,000 in prescriptions since the program’s launch.

John Simpson of Consumer Watchdog, a nonprofit consumer advocacy group based in Santa Monica, criticized the chamber effort for, among other things, benefiting from the program by getting $1 per prescription.

“What I see with the chamber coming in is they are promoting this and calling it virtually the same thing as the city,” Simpson said.

“It is confusing to the public and disingenuous and deceptive to ride on the coattails of the city,” Simpson said. “If they want to do this, they should be clear that it is not the same as the city program.”

Also, Simpson said he believes the city program will result in greater savings on drugs for residents, with reductions of 35-37 percent seen so far.

Eads said chamber officials have talked with the mayor about the situation, but believe there is no need to change the name of their program.

“We have been working on this for a long time,” Eads said. “We think the main point is to help people get some savings in these times.”

Both programs work on the concept of offering the discounts available from bulk purchases.

Eads said the chamber only recently announced its program and already has seen the card downloaded 1,500 times.

The Mayor’s Office had no comment on the Chamber effort, but said he will continue to promote the city program.

Consumer Watchdog
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