March 1 PAPER: Proposal for Drug-Discount Card Is Modified in Bid to Avert Fight (WSJ, B6)
Proposal for Drug-Discount Card Is Modified in Bid to Avert Fight
By Sarah Leuck
Staff Reporter of The Wall Street Journal
WASHINGTON –In an attempt to stave off a legal battle with the pharmacy industry, the Bush administration released a modified drug-discount card proposal that includes requirements on how card sponsors would have to provide savings.
Among the changes in the plan are requirements that participating drug manufacturers contribute to discounts and that card sponsors pass savings on to consumers.
The program is designed to allow pharmacy-benefit managers or other entities to negotiate with drug manufacturers and pharmacies for discounts on prescription drugs for recipients of Medicare, the federal program for the elderly and disabled. In addition, the administration wants to include states as possible sponsors of discount-card programs. For a nominal fee, Medicare beneficiaries would be able to purchase a card for discounts on certain prescription drugs.
Industry groups representing chain drugstores and community pharmacists said the proposed rule does little to address their main argument—that the administration lacks the authority to implement the card program without legislation. The National Association of Chain Drug Stores and the National Community Pharmacist Association filed suit soon after the program was announced last summer, and both groups left open the possibility they would return to court to press their case.
The groups had argued that the program as it was initially written would cut into their profits while not requiring drug manufacturers to contribute to the discounts. Community pharmacists said the program would put them out of business.
Last year, a federal judge temporarily blocked the administration from implementing the card program, but allowed the Centers for Medicare and Medicaid Services, the agency overseeing the proposal, to write the new proposal and get public comments for 60 days.
Yesterday evening the pharmacy groups were still looking over a 168-page document that CMS released. “The threshold question is, is this substantially different that the previous rule? We don’t think that it is,” said Larry Kocot, general counsel for NACSD.
Administration officials have estimated average savings under the card program at 10% to 40%, but many expect discounts to be on the lower end of that scale.
"My guess is seniors are not going to see much relief," said Ron Pollack, executive director of advocacy group Families USA. He said there are "no standards" on how much of a discount drug makers would have to provide.
Administration officials have said they would push for drug-card legislation if they were thwarted on the administration front, but they acknowledged passing such a measure through Congress would be difficult. Health and Human Services Secretary Tommy Thompson said the odds were “60-40 against” the drug card’s getting passed as legislation. He said he is optimistic that the drug-card plan will be implemented within a year administratively.
Amid a stalled debate about how to provide a Medicare prescription-drug benefit, some drug companies such Pfizer Inc. and GlaxoSmithKline PLC, as well as some states, have said they would launch their own discount-card plans.
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