MedicareRx was proposed as a temporary fix to help uninsured seniors afford their medications while Congress continues to debate how and when to add prescription drug coverage to Medicare.  Under the original proposal, large national companies that manage pharmacy benefits (PBMs) would, for a one-time fee of $25, enroll Medicare beneficiaries who would receive discounts on their prescriptions from retail pharmacies.  A recent study by the General Accounting Office found that seniors using such discount cards in Washington, Chicago and Seattle saved an average of 8.2% off retail prices on brand name drugs and 37% on generics.

The original proposal sparked immediate controversy.  Critics complain that MedicareRx is not prescription drug insurance and that it would provide little savings.  Many senior advocates, including TREA Senior Citizens League, worry that the proposal could be a distraction and that Congress may drag their feet on adding prescription drug benefits to Medicare.  In addition, seniors would be limited to only one card at a time and that would prevent them from obtaining discounts from drugs that another card may offer.  Currently there are few restrictions on cards and seniors may enroll in more than one program.

Retail pharmacies are firmly opposed to the proposal.  They fear that the discounts would disproportionately come at their expense.  Small local pharmacies also fear the plan would steer seniors to mail order pharmacies.  Organizations representing retail pharmacies successfully sued the government over the original proposal.

To avert another legal battle, the new MedicareRx proposal differs from the original by requiring sponsors of discount cards to obtain discounts from drug manufacturers and to offer a discount on at least one drug in every major category of medicine.  It does not specify how large those discounts would have to be.  But pharmacy organizations that sued last summer say the new proposal is still illegal.  "It's like old, recalled bad medicine in a new container," said John Rector, general counsel for the National Community Pharmacists' Association.  They promise to sue again.
 
Source:  "Is the Right Drug in the Cards?" Bill Brubaker, The Washington Post, March 10, 2002.  "Pharmacy Groups Call Bush's Drug Card Proposal Illegal," Congress Daily, March 1, 2002.  "Prescription Drugs: Prices Available Through Discount Cards And From Other Sources," U.S. General Accounting Office, GAO-02-280R, December 5, 2001.
 
To read more on this topic, click on the following links.
"Can Drug Discount Cards Save You Money?" http://www.tscl.org/NewContent/101425.asp
"MedicareRx Discount Card Sent Back to Drawing Board" http://www.tscl.org/NewContent/101304.asp
"Rx for Prescription Drug Costs?" http://www.tscl.org/NewContent/101181.asp

March 2002